Ledelsesaftaler

Ledelsesaftaler, or management agreements, are formal employment contracts for senior executives in Danish companies. They define the terms of employment, compensation, duties, and performance expectations, and are typically negotiated with the board. These agreements apply to key managers such as the chief executive officer and other top executives and guide the relationship between the individual and the company.

A typical ledelsesaftale includes elements such as base salary, annual and long-term incentive plans, pension arrangements, and severance pay or notice periods. It may also cover change-of-control provisions, non-compete or non-solicitation clauses, confidentiality, data protection, and clawback provisions for incentive compensation if metrics are not met or fraud occurs.

Regulatory and governance context: In Denmark, governance rules and disclosure requirements apply to executive remuneration. For listed or large companies, remuneration policies and aggregate pay for management are disclosed in annual reports. The board generally approves the terms, and in some cases shareholders may have a say on certain aspects or substantial severance arrangements. Legal constraints may address reasonableness of termination benefits and other protections.

Practice and considerations: Ledelsesaftaler are scrutinized for transparency, alignment with performance, and risk management. Practices vary by industry and company size, with benchmarking against peers and market norms. Contracts may be renegotiated at renewal or in response to changes in performance, regulation, or corporate strategy, balancing incentives with prudent governance.