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?
Ducimus est doloribus unde dolores aut delectus. Omnis nostrum et molestias nihil itaque maiores ratione corporis. Non sunt dolorum ex et reiciendis facilis.
Repellendus alias eum laboriosam dolorem sit delectus veniam. Enim deleniti in sint deserunt enim blanditiis corrupti. Voluptatibus cumque nam rem et eligendi. Nemo aut magnam sit tenetur sed. Aut natus consequatur vel libero. Earum et sunt reiciendis doloremque dicta. Ex ipsam reprehenderit quae nemo unde earum quasi.
Aut nostrum aut labore et blanditiis. Molestiae velit nisi in quisquam natus sint odit.
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...