The departure from Old Trafford of the now ex-manager, has earned David Moyes a reported £4 million gross; but it has cost him £16 million gross.
Whether in football or in business more generally the value a senior executive expects to get out of the termination of his employment depends entirely upon the terms of the contract which he agreed when he commenced employment.
It is understood that Manchester United insisted upon a one year notice clause in the event that targets were not achieved. Had the target been met then the value of any subsequent termination would have increased significantly.
When you are offered a top position bear in mind this one very important principle; the higher you are the faster you fall so be sure when agreeing to take up that all important top position, to maximise your protections.
Clauses which, if properly drafted, will make a huge financial difference in the event of termination include the notice clause. This must be drafted in such a way that the value of bonuses earned, and which could have been earned during the notice period, are protected.
It is also important to ensure that the targets against which you will be judged are attainable and objectives set are agreed by both parties.
In the case of David Moyes the failure to ensure that the club finishes the season in at least fourth position in the Premier League is a demonstrable fact. However, you need to ensure that any perceptions of failure leading to termination of your contract are demonstrable and not subjective.
Although the reported figures quoted in this piece seem far out-with the realms of reality, the principals and potential pitfalls outlined are very much of importance and aspects you should consider carefully with any contractual employment negotiations.
If you have any questions or wish to discuss this further we would be delighted to help.