Tuesday, November 7, 2017

Steve Peacher/ "Am I entitled to severance on top of my contract buyout?"

Jul. 31, 2017 The Ladder: Steve Peacher: Today I found this article in the Globe and Mail:



Steve Peacher, 53, is president of Sun Life Investment Management, the third-party institutional-investment-management arm of Sun Life Financial.

My father had majored in accounting, and it’s a practical major in terms of moving into the investing world. When you major in accounting, most of the people you’re going to school with every day are angling to become accountants. But I really just wasn’t excited about going to work for one of the big accounting firms as an auditor. At the time, the jobs that seemed the most interesting were the jobs at investment banks.


I grew up in Wheaton, about 30 minutes outside of Chicago. Wheaton is one of those typical all-American, Midwestern towns. It was a great place to grow up and sports were central to our lives.

I got an offer to work at Dean Witter Reynolds, this was 1986. What was important to me was that they had a small investment-banking office in Boston. I was interested in moving up to Boston because my wife, who wasn’t then my wife, was up there.

I worked for a guy who was demanding, but he would also give me a lot of responsibility early on because the office was small and there was no one else to do it. I think what I learned from that is that if you give people an opportunity, people will rise to it.

At the beginning of 1990, I had answered an ad in the Wall Street Journal. Putnam Investments was looking for a high-yield bond analyst. It turned out to be great timing for me that was not by design, totally by luck. Drexel [Burnham Lambert] had just gone bankrupt and Mike Milken was under indictment and people wondered if that market was going to go away. But that ended up being the bottom of that market.

In 1999, I ended up running our high-yield bond group. I had gone from analyst to director of research, been a portfolio manager, then was running the group. It gave me experience in analyzing companies, managing money, managing people.

Between 2000 and 2005, Putnam Investments had gone through a couple of tough times. None of this I was directly involved in, but it impacted the firm. In 2005, I was contacted about a role in Boston to run the fixed-income department at Columbia Management. It felt like a good time to make a change.

I went through the heart of the financial crisis there at Columbia. I had a nice office in the corner but I took one of the spots in the middle of the trading desk. It was just a way to get things done, be in the middle of things, be very visible and be able to have impromptu conversations.

By the summer of 2009, we were close to striking a deal with Ameriprise to buy Columbia Management from Bank of America. And just at that time, I got a phone call about the role of chief investment officer at Sun Life.

I had always been managing or been working with teams that managed other people’s money, but the prospect of being inside a financial institution where you are managing money on the balance sheet across a broad array of asset classes was also interesting to me.

At Sun Life, we own [MFS Institutional Advisors], which is a big, long-standing investment manager. In 2012, the board asked the question: Asset management is one of our four [strategy] pillars – does that just mean we are going to own MFS? I went back to the board nine months later, and said, “I think Sun Life has the opportunity to develop a third-party institutional asset manager by taking the strategies that we use to manage our own money and offering it to other institutions.” The board liked that idea and we started to pursue that in late 2013.

At that point, I was wearing two hats. I was the chief investment officer and, at the same time, I was driving this new business. As that got off the ground, we made some acquisitions. By the end of 2015, CEO Dean Connor and I decided that I just couldn’t wear both of those hats. So we hired a new chief investment officer.

Investment firms are almost like sports teams. That’s about having good people, but it’s also about the culture they’ve worked in and built up over time. Our goal has been to not disrupt the culture at the firms that we bought but to try to bring some benefits to them as we launch new products, give them new resources.

Their clients don’t want to see that their teams are disrupted. So it’s been important to me to make sure that doesn’t happen. Two years later, we’ve had almost 100-per-cent client retention, almost 100-per-cent employee retention.

Physical fitness continues to be an important part of my life and I try to squeeze in fairly intense workouts when I can.

As told to Patrick Brethour. This interview was edited and condensed.



"Am I entitled to severance on top of my contract buyout?": Today I found this article in the Globe and Mail:

THE QUESTION

I am a 63-year-old executive director for a non-profit. The board and I discussed an organizational change that would mean hiring a new chief executive officer.

In talks, I believed I would ride out to the end of my contract and then transition to a lower position. Instead, I have been told to be a consultant to the new CEO and that a new position will likely not be created for me. I told the vice-chair of the board that I felt consulting was outside my contract.


She agreed and I am now awaiting a buy-out offer.

Am I entitled to severance on top of the contract payout? My expectation was that I would continue to be employed until I was 65. Can I expect further compensation, or does the end of my contract negate this?

THE FIRST ANSWER

Eileen Dooley
Vice-president, VF Career Management, Calgary

When a new CEO arrives, chances are they do not want you hanging around – and for good reason. Although your knowledge of the role is valuable and could be helpful to an incoming CEO, the reality is the new person likely wants to start off with a clean slate, regardless of the agreement you made with the board.

I worked with an organization where the overlap between executive directors was two years. It’s uncomfortable for the incoming ED as the outgoing one is always hanging around. Plus, for staff, there’s confusion about who to go to for information and decisions.

Talk to a lawyer and get your severance and exit strategy in place. Work in a career transition program so you can get assistance and leave on good terms to move toward a new, fresh role.

THE SECOND ANSWER

George Cottrelle
Partner, Keel Cottrelle LLP, Toronto

Assuming your employment agreement is clearly worded, terminating your employment on completion of the term would not result in any additional entitlement. In most provinces, the notice requirements of the applicable employment legislation would apply to your fixed-term contract, and were likely complied with.

A written agreement can be verbally amended. If there was an agreement to extend your employment past the termination date for an indefinite period, which your employer then breached, this could give rise to additional rights. The employer may dispute that there was an agreement to extend your employment, on any basis, past the termination date, notwithstanding its express representations.

Your employer constructively dismissed your employment prior to completion of the term, after you had agreed to an early transition, relying on the promise of continued employment. We assume you anticipate the buy-out package will be based on your compensation to the end of the contract term, but not beyond.

If you can substantiate the employer’s representations of transitioning your position, and continuing your employment beyond the term, then you may be entitled to some additional compensation. This amount would not be based on your expectation to work to 65, as there were no discussions with your employer in that regard.


Paul Champ1
1 day ago

There are so many variables here regarding the terms of the contract. I seriously doubt its a true fixed-term contract, and if it is, the fixed-term clause could likely be challenged if its been renewed more than once.

Big picture, the organization clearly wants a smooth transition at the ED position. Given that there are practically always grounds to challenge restrictive fixed-term or termination provisions in employment contracts, for a departing ED there is likely lots of room for amicably negotiating a reasonable exit package. Consult an experienced employment lawyer for advice and guidance.

openwater2010
1 day ago

One consideration in BC is whether you worked on the Employer's Premises or not.
My wife had an IT support contract where they told her to come in to the office to monitor the monthly billing runs, and for to bill time for a goofy team building session. Korkin Commission happened, and she was told not to bother coming in any more for those, to make her a bona fide contractor.

Several Indendent Contractors I worked with were told to take their Korbin Employee offers or be terminated. They all said No Thanks. Years later they were still there but subcontacting through IBM Global as part of IBM's BC Subcontracting Quota.

jojo ba
24 hours ago

Depending upon the jurisdiction generally the terms of your engagement/removal are governed by the contract. If your contract had expired and you have continued beyond the expiry date an argument could be made that the contract is open-ended entitling you to a negotiated payout. If the contract has not expired then you are entitle to a payout of the remaining unexpired term.

You would only be allowed severance if the contract called for it.
Usually the CEO gets removed from his duties by the board when they have lost faith in your abilities so I doubt you will see any consulting so I would gather up your contract, review it in detail to see your entitlement, then talk to a lawyer for a quick review. If you do not have a compete clause then consider starting up your own non-profit and tapping the donors you are close to. You may do some good or your former organization might sweeten the deal for a "No Compete" clause.

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