The Key Men

The value of employees in the tech world, what should determine that? What should their salary and profit participation be based on?

Currently, this is a somewhat dark area. Employees don’t have much knowledge about their own worth in the market place. In contrast, their employer companies do know the value of their employees.

One of the ways companies know their employee value, is when one of these companies receives an offer of purchase.

In the tech world, that offer is often based on the current staff. Because many times, the purchasing company is only making an offer to obtain the employees a given company has under contract.

In fact, if one looks closely at the purchase offers from huge tech companies, there is often what is called a,“key man clause”, in the contracts. These clauses state plainly that if certain named employees are not included in the purchase deal…well, then there is no deal.

So what are the, “key men” really worth in, let’s say a $4 billion dollar purchase price? Is a $100,000 dollar bonus really consistent with their actual value to the buyer?

One thing is certain. The “key men” will never even know what happened to them in the purchase. They will all be delighted at their good fortune in getting a bonus.