Executive Compensation Contract Template for Indonesia

Executive Compensation Contracts are essential legal documents used when appointing senior leadership positions within organizations operating in Indonesia. These contracts must comply with Indonesian employment law, particularly Law No. 13 of 2003 on Manpower and relevant OJK regulations for public companies. The document is typically implemented when hiring new executives, promoting internal candidates to executive positions, or renewing existing executive contracts. It comprehensively outlines compensation packages, including fixed and variable components, equity participation, benefits, performance metrics, and post-employment obligations. The agreement needs to balance market competitiveness with regulatory compliance while protecting both the company's interests and the executive's rights under Indonesian law.

1. Parties: Identification of the company and the executive, including their complete legal names and addresses

2. Background: Context of the agreement, including the executive's appointment and role

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Term: Details of the executive position, responsibilities, and duration of appointment

5. Base Salary: Fixed annual salary amount, payment frequency, and review mechanisms

6. Variable Compensation: Structure and terms of bonuses, incentives, and performance-based compensation

7. Equity Participation: Terms of stock options, restricted shares, or other equity-based compensation

8. Benefits and Allowances: Details of benefits package including healthcare, insurance, transportation, housing allowances

9. Working Hours and Leave: Expected working arrangements and entitled leave periods

10. Performance Metrics: Key performance indicators and evaluation criteria

11. Confidentiality: Obligations regarding company confidential information

12. Non-Competition and Non-Solicitation: Post-employment restrictions and their geographical/temporal scope

13. Termination: Grounds for termination and associated procedures

14. Severance: Severance payment calculations and conditions

15. Governing Law: Specification of Indonesian law as governing law and dispute resolution mechanisms