Before you go: Smart steps for a smooth executive departure

It is that time of year when 2024/2025 annual bonuses are about to be paid out and many senior executives begin to consider their next move. If you’re thinking about leaving your role, this guide offers practical tips to help you prepare and negotiate a smooth and dignified exit.
Start with the end in mind
It may feel odd to plan your exit from a business before you’ve even started employment – but it will help you in the long run. Exit terms should be a key consideration when negotiating employment contacts because they generally contain detailed and one-sided provisions to protect the business’s interests as fully as possible. Your employment contract should protect your interests, not just the employer’s. Before signing, make sure it reflects any promises made and includes terms that work for you.
Here are the key points to consider before entering into an employment contract:
Check the notice period – is it too short or too long and are there any garden leave and payment in lieu of notice provisions? If you are under notice for any reason, do you remain eligible for payment of a bonus and/or other awards? If bonuses are not payable when notice has been served by either party, you could seek to negotiate the exclusion of the provision for certain types of departure, for example if you are served notice because you have been made redundant, your exit has been mutually agreed or you cannot work because of incapacity.
Carry out a detailed review of any additional documents – particularly those that govern bonus schemes, long term incentive plans (LTIP) and any other types of awards to ensure you fully understand the rules, any malus and clawback provisions, good leaver/bad leaver provisions and any defined exit events. You should also establish whether there is any discretion for the business to treat you as a good leaver if, for example, you mutually agree your departure and you do not automatically fall within the good leaver definition.
If any bonus or award is conditional on a specific exit event – if there is a sale or initial public offering, you will need to consider your exit timing carefully and any steps you can take to protect yourself from being dismissed shortly before an exit event. If, for example, you are leaving under a settlement agreement initiated by the business, you may wish to ask for a warranty that your employer is not aware of any of any matters that are likely to lead to an exit event or a guaranteed bonus payment if an exit event occurs within a short, specified period after the termination of your employment.
Have you checked the restrictions? How long are they? Is any period of garden leave set off against the restricted period? Many employers will have well-drafted and fairly standard restrictive covenants in senior employment contracts, however, the restrictions may need to be amended to take into account your specific circumstances. For example, if you are going to be bringing your own established business and/or contacts that you have built up over the years, there will need to be carve outs in the restrictions. There may also be additional restrictive covenants embedded in bonus and award schemes which can differ to those set out in the employment contract both in scope and duration so it is important to check those too. Any agreement to modify, reduce, or waive restrictions as part of entrance or exit discussions should therefore extend to any LTIP and award restrictions wherever possible.
Consider the vesting periods for any LTIPs – which are usually three years and seek clarity on whether there is flexibility for the business to accelerate vesting or pro-rate awards under the LTIP scheme in certain circumstances such as redundancy or an agreed departure.
Seek legal advice – before entering into the employment contract in connection with any on any post-termination restrictions, bonus, LTIP and award scheme rules, and other award schemes and any overly onerous or unusual provisions.
Exit timing and strategy
If you wish to initiate an exit, you should carefully consider the implications first. In particular:
Would you need to repay any bonuses and/or would you have to forfeit unvested awards or carried interest and future awards? Depending on your bargaining position with any new employer, it may be possible for you to negotiate your new employer buying out the awards and guaranteeing a first-year bonus as part of your new contract.
How can you protect your personal reputation in the market and the business? You may wish to seek to agree any informal and formal communications about your departure both internally and externally during the negotiation process.
Are there any regulatory issues in respect of you personally and/or the behaviour of the individuals responsible for or involved in your exit? For example, is there any conduct issue which might call into question a person’s fitness and propriety under the Senior Managers and Certification Regime or is there anything which might impact a regulatory reference?
If you believe you are being pushed or managed out of the business, you should seek legal advice immediately so that protective action can be taken, especially if the circumstances could give rise to unfair dismissal, whistleblowing, a discrimination claim and/or any regulatory issues. It is essential to act quickly in these situations, even if you are already engaging in settlement discussions with the business.
Whether you’re negotiating a new role or planning your departure, seeking legal advice is essential. Employment contracts, bonus schemes, and exit terms can be complex—and the stakes are high. Having the right legal guidance ensures you’re protected, informed, and in the strongest possible position.
At Forsters, our employment team has extensive experience supporting senior executives through every stage of a career move—from onboarding to exit. If you’re considering a transition or want to review your current arrangements, we’re here to help.