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Compensation Agreement

Create a compensation agreement for an existing employee: new base pay, incentive bonus, commission, allowances and retention bonus terms.

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What this document does

A two-party agreement between an employer and an existing employee that sets out the employee's compensation plan from an effective date, such as a raise, a promotion, or a variable pay plan: base salary or hourly pay, an optional incentive bonus, commission, allowances and retention bonus, a reference to any separate equity award, how incentive plans may change, and optional recovery of incentive pay paid on inaccurate results. All other terms of employment stay the same.

What it covers

  • Parties
  • Effective Date and Position
  • Base Pay
  • Incentive Compensation
  • Other Compensation
  • Relationship to Employment
  • Additional Terms
  • General Provisions

A template you fill in yourself from your own answers. LeaseCraft is not a law firm and does not give legal advice; for advice about your situation, talk to a lawyer.

How it works

1

Answer the questions

Plain-language questions about the people, dates and terms.

2

Preview it free

Read the document built from your answers and change anything before you download.

3

Download PDF and Word

Included with LeaseCraft Annual ($19.99/year).

Questions about the Compensation Agreement

A short agreement between an employer and a current employee that sets out the employee's pay from an effective date, often after a raise, a promotion, or a new bonus or commission plan. It covers compensation only; all other terms of employment stay the same.

The agreement states that it does not change the nature or length of the employment. If the employment was at will, it remains at will, unless applicable law provides otherwise.

Yes. You can add a discretionary or formula incentive bonus, a commission rate with chargeback terms, phone, car or remote-work allowances, and a retention bonus with optional repayment if the employee resigns soon after it is paid, to the extent permitted by applicable law.

Only by reference. The agreement notes that any equity award is governed solely by its own plan and award documents, and it does not grant or describe equity terms.

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