Hi all.
My company has offered me the 'oppertunity' of becoming a non shareholding director with a view to become a 20% owner in 2 years.
My salary will increase to match the other directors but I wont gain any voting rights or profit share for the first two years.
In 2 years time I will have to buy the 20% from one of the existing directors who is retiring in 4 years. My payment will be made by foregoing subsequent profits after share transfer. If the current rate of profit is maintained it will take approx 6-7 years to pay for the 20%.
The company does not have any assets as such. Profits are withdrawn annually and offices/equipment is rented. its only real asset is its reputation, knowledge base and 'goodwill'. We are a service company within the construction industry.
I currently generate approx 20% of earnings from my clients and I see this as an attempt to stop me leaving to set up in competition. Other than the existing directors I am the most experienced member of staff.
I'm not experienced in company law. Are there any obvious pitfalls to the proposal? As you can see from the time of the post, I'm loosing sleep trying to decide if it is a good deal. Any sound advice is appreciated!
Thanks
C
My company has offered me the 'oppertunity' of becoming a non shareholding director with a view to become a 20% owner in 2 years.
My salary will increase to match the other directors but I wont gain any voting rights or profit share for the first two years.
In 2 years time I will have to buy the 20% from one of the existing directors who is retiring in 4 years. My payment will be made by foregoing subsequent profits after share transfer. If the current rate of profit is maintained it will take approx 6-7 years to pay for the 20%.
The company does not have any assets as such. Profits are withdrawn annually and offices/equipment is rented. its only real asset is its reputation, knowledge base and 'goodwill'. We are a service company within the construction industry.
I currently generate approx 20% of earnings from my clients and I see this as an attempt to stop me leaving to set up in competition. Other than the existing directors I am the most experienced member of staff.
I'm not experienced in company law. Are there any obvious pitfalls to the proposal? As you can see from the time of the post, I'm loosing sleep trying to decide if it is a good deal. Any sound advice is appreciated!
Thanks
C