In the world of employment agreements, a “single trigger” agreement is a type of provision that can have significant implications for both employers and employees. Essentially, a single trigger agreement allows an employee to receive a payout or other benefit if a specific event or condition is met – typically a change of control or sale of the company.
The term “single trigger” refers to the fact that only one event needs to occur for the payout to be triggered. This is in contrast to a “double trigger” agreement, which requires two events to occur before the payout is triggered – usually a change of control and the employee being terminated.
From an employer`s perspective, a single trigger agreement can be an effective tool for retaining key employees and incentivizing them to stay on board through a potentially tumultuous transition period. By offering a significant payout in the event of a sale or change of control, employers can help to ease employees` fears about uncertainty and instability.
However, single triggers can also present risks for employers. If an employee is guaranteed a payout regardless of their own performance or contribution to the company, there may be little motivation for them to continue working hard or striving to improve. Additionally, a single trigger agreement can make it more difficult for a company to attract and retain new talent, as potential hires may be put off by the idea of a single lump-sum payout instead of ongoing incentives and opportunities for growth.
For employees, a single trigger agreement can be a valuable benefit, particularly if they have been with the company for a long time and have invested a significant amount of time and effort into its success. However, it`s important for employees to understand the potential risks and downsides of such an agreement, and to carefully consider whether it aligns with their own career goals and values.
Overall, a single trigger employment agreement can be a powerful tool for both employers and employees. However, it`s important for both parties to carefully consider the implications of such an agreement and to ensure that it aligns with their respective goals and priorities.