Ed Hauder
Nathan Williams
Introduction
Meridian Compensation Partners 2026 Study of CEO Employment Agreements (“Study”) provides comprehensive insights into the prevalence of employment agreements covering chief executive officers (“CEO”) and the key terms of those agreements (including terms related to the duration, forms of compensation, severance and other benefits, imposition of restrictive covenants, dispute resolution and other administrative provisions).
Report Scope
The Study reports on the prevalence of CEO employment agreements maintained by Russell 3000 and S&P 500 companies. In addition, the Study provides current information and data on the terms of CEO employment agreements entered into by S&P 500 companies. In total, 107 S&P 500 companies have entered into such agreements. Of these 107 employment agreements, this Study reviews 95 of these CEO employment agreements (“CEO Employment Agreement” or “Agreement”). All 95 companies (which are listed in Appendix A) are U.S.-based and none are foreign private issuers.
The Study derived data on the prevalence of CEO employment agreements from ESGauge and derived information on the terms of the Employment Agreements primarily from public filings of such Agreements.
Overview of Employment Agreements
An executive employment agreement is a formal, bilateral contract between a corporation and a key executive that defines the terms and conditions of the professional relationship. Employment agreements do not alter the ‘at-will’ nature of an executive’s employment. Instead, employment agreements establish specific contractual rights and obligations for both parties, primarily by defining the economic consequences and procedural requirements associated with a potential separation. In addition, employment agreements often provide detailed terms on an executive’s primary compensation components. The term or duration of an employment agreement may also provide expectations between the parties with respect to tenure of the agreement and the ease by which terms may be negotiated.
Considerations for Corporate Boards
In evaluating an existing or potential CEO employment agreement, corporate boards should consider whether the Agreement:
• serves as a useful tool for talent acquisition, retention and risk management,
• provides competitive level of compensation, benefits and severance,
• safeguards corporate interests,
• allows for terms to be reset through sunset provisions,
• reflects current corporate governance environment,
• addresses dispute resolution,
• complies with applicable regulatory requirements; and
• includes terms which clearly and unambiguously reflect the intent of the parties.
This Report provides comprehensive information and benchmarking data which can be used to assist in drafting new employment agreements or to ensure that existing agreements align with company objectives, market norms and investor expectations.
Boards and senior management should seek advice of legal counsel prior to entering into a new or modifying an existing employment agreement.