The buyer is proposing a transition plan where we must remain as active co-CEOs for twenty-four months post-close under an employment agreement that strips us of final decision-making power. How do we structure our post-closing transition agreement to move us quickly into a strategic advisory role while protecting our compensation from arbitrary termination?

Question

Tyler Smith · Accepted Answer

Buyers often demand that owners sign long-term employment agreements to manage the transition post-close. However, remaining as an active executive under a new owner who has final decision-making power is a common source of post-transaction frustration.

To avoid this outcome, you should negotiate a clear transition plan that moves you quickly from an active executive seat into a strategic advisory role. Use your EOS® Accountability Chart to define this transition.

Identify the successor for your seat on the Accountability Chart and use the diligence period to run a structured handoff. Show the buyer that your successor has the GWC™ to run the daily operations, which reduces the buyer's reliance on you.

Structure your post-closing agreement with a short, defined operational transition period, followed by a consulting agreement:

- Limit your active executive transition to ninety days to ensure a clean operational handoff.
- Transition into a non-executive advisory or board seat for the remainder of the term.
- Ensure your consulting compensation is fixed and not subject to performance metrics or unilateral termination by the buyer.

This structure protects your personal freedom while giving the buyer the comfort of your strategic guidance, ensuring a successful integration without trapping you in daily operations.