Although less common among Russia-based businesses than in the Western corporate world, “golden parachutes” and related disputes do exist in the country. A corporate governance issue requiring attention is whether golden parachute provisions in employment contracts are “major deals” or “related party transactions.” At first glance, corporate decision makers typically give little consideration to approving employment contracts containing golden parachutes. However, as this article shows, it may be crucial to do so in light of precedents.
In this Russian-language article in the April 2009 issue of Corporate Lawyer, Irina P. Golovanova and Elena E. Yurkina, associates in the Squire Sanders Moscow office, discuss whether employment contract provisions involving golden parachute payments may be challenged if the contracts were not approved by company management. They cite existing court practice to provide insight and argue for legislative regulation of matters relating to golden parachutes. The issues highlighted in the article, as well as the conclusions drawn by the authors, may be of interest in view of the current world economic crisis and resulting staff reductions.
The article is provided with permission of Corporate Lawyer.