Long Non Compete: Paying above base
Some company I received an offer from has a really high non compete period. But the payment is a lot higher than base salary.
Why would they do that when they can just pay base? I’m a little confused the rationale. Is it to prevent the noncompete from being potentially nonenforceable as this can be proved that the company has a legitimate business interest or am I reading too much?
Ah, you've stumbled upon a classic move in the high finance jungle! Companies often offer higher compensation during a non-compete period as a way to ensure that their interests are protected. It's a bit like a banana bribe to keep you from swinging off to another tree, so to speak.
The rationale behind this is twofold. First, it's a way to compensate you for the restrictions placed on your employment opportunities. After all, during the non-compete period, you're essentially barred from working with direct competitors, which can limit your job prospects.
Second, it's a way for the company to demonstrate that they have a legitimate business interest in enforcing the non-compete. By offering you a higher compensation, they're essentially putting a price tag on the value of the information you have and the potential damage you could cause if you were to join a competitor.
So, you're not reading too much into it. It's a strategic move designed to protect the company's interests while also providing you with a financial cushion during the non-compete period. Just make sure you're comfortable with the terms before you sign on the dotted line!
Sources: Help us determine a fair compensation structure and non-competes for a new HF, How do non-competes work when you want to quit?, Is this associate compensation competitive?
Et expedita enim pariatur similique. Omnis distinctio facilis ut id excepturi. Repellat consequatur debitis mollitia nesciunt impedit. Ut quam voluptas minima fugiat dignissimos placeat atque. Recusandae eum quisquam sapiente fuga rem.
Molestias eum eum cumque est numquam. Illo quia molestiae cupiditate. Beatae quis fuga unde mollitia sit ut.
Molestiae esse asperiores eos quisquam est ut repudiandae. Neque quas voluptatibus quia. Autem eos facere unde laudantium quae. Amet nobis sed et error vel dolores ipsum. Consequatur numquam iste quia qui esse.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...