Designing an Executive Search Mandate: What Employers Can Agree First
Three public documents and two firm filings show how payment, replacement and information risks can be allocated differently.
Executive Search Research LLC
Before an employer appoints an executive search firm, it can settle several choices in writing: which organisations the firm may not recruit from, who does the work, how wide the research goes, how candidates are assessed, how and when fees are paid, what happens if a hire leaves early, what is reported, and who holds candidate information. The AESC Professional Practice Standards say the terms of engagement should be in writing, giving a clear understanding of the assignment, the lead advisor, scope, timing, fees and payment schedule, deliverables, and specific terms that might include guarantees, off-limits, conflicts and data management (page 2, Terms of Engagement). That wording is a standard for AESC members, not all firms, and it sets no fee level, guarantee period, off-limits duration, KPI or substitution rule. The absence checks cover only the named documents; they cannot show that no firm offers such terms.
The evidence below comes from two firms’ own disclosures and three public documents of different types: a request for proposals, a signed contract and a framework with optional call-off schedules. None is a market benchmark.
What the two firm filings disclose
Korn Ferry’s Form 10-K for the fiscal year ended 30 April 2026 (filed 26 June 2026) states in its audited revenue recognition note that fee revenue from executive and professional search is generally one-third of the estimated first-year cash compensation of the placed candidate, plus a percentage of the fee for indirect engagement-related expenses, and that an uptick fee is billed when actual compensation exceeds the estimate (Note 1, page F-12). The indirect-expense percentage is not quantified. No replacement guarantee for a placed candidate was found in that filing. That absence does not mean Korn Ferry offers no guarantee.
Heidrick & Struggles’ Form 10-K for the year ended 31 December 2024 (filed 3 March 2025) describes, in its audited revenue note, a retainer of approximately one-third of estimated first-year compensation plus indirect expenses at a specified percentage of the retainer that is not disclosed, generally billed in one-third increments over three months from the month the client accepts the contract, with an uptick of often one-third of any excess compensation (Note 3, page 50). Its replacement guarantee provides an additional search free of charge except for expense reimbursements if the candidate is terminated by the client for performance reasons within a specified period whose length is not disclosed (Note 3, page 50). Both are descriptions of general practice, not quotes for any particular mandate. In both filings the revenue notes are audited; the risk-factor and Item 1 narratives cited here are not.
Three public documents compared
The table compares fee staging, failure or cancellation, and replacement terms. It keeps the document types distinct: the MassArt document sets requirements for bidders, the Marshall document is a signed contract, and RM6394 is a framework whose call-off schedules may add terms.
| Document and type | Fee staging | Failure or cancellation | Replacement trigger and remedy |
|---|---|---|---|
| MassArt RFP 26-10, issued 3 March 2026, with Attachment 1 and Addendum 1 (13 March 2026). RFP requirements, not a signed contract. | 33% at contract execution, 33% on an approved candidate pool, 34% on executed candidate acceptance (Payments). The RFP sets no rate; bidders propose the fee. | No final payment on a failed search, unless the firm put forward at least three qualified and viable candidates and MassArt hired internally (Payments). | Tier 1 full searches: one-year guarantee from the start date, with listed exceptions; restart within three months; no additional professional fee, but ordinary reimbursable expenses plus 10% of the original fee (Performance Guarantee). Attachment 1 words the same guarantee as “at no additional cost”, an unresolved difference between the two documents. |
| Marshall University executive search agreement, dated 13 November 2024, signed by both parties, renewed to 5 December 2027. Signed contract. | Search 1 fixed fee of $80,000: initial payment $32,000 within 30 days of the effective date (40.0% of that fee), final payment $12,000 within 30 days of appointment (15.0% of that fee) (Article 5.a.i and 5.d.i). The fee table footnote states the dollar amounts are based on the assumed annual base salary. Marshall additional hire fee: 25% of annual base salary, with salary deemed at least $120,000. Trigger: a “services agreement of any kind” with another pool member for any position within one calendar year of pool presentation. Article 3.c includes candidates the client has or considers for the position, “regardless of whether AGB Search identified that individual”. (Articles 5.b and 3.c). | If a candidate pool is presented and no one is placed, the firm may at its sole discretion extend for up to six months from pool presentation; if that extension occurs and still no one is placed after that period, the agreement is deemed completed and the final payment falls due (Article 11.a). The clause does not address what happens if no extension is exercised. | Voluntary or for-cause departure within one year of the candidate’s start date: follow-up search for up to six months from departure, no increase in the principal sum, expenses still payable, client service and support fee waived for the follow-up; nothing if the client terminates without cause, including death, dismemberment or disability causing inability to serve; written notice within 10 business days of the event and full payment by the date of notice; no refunds; at most one follow-up search per position (Articles 11.b to 11.e). |
| UK RM6394 framework (Lots 1-3), running 3 August 2026 to 2 August 2029, with Framework Schedule 1 (ODT). Framework terms; call-offs may add schedules. | Fixed fee in three stages: 25% on advert placement, 25% on a buyer-signed-off shortlist, 50% on appointment and acceptance (Schedule 1, paragraph 5.2.1). | If the buyer cancels, payment is due up to the point reached; if the supplier cancels after the advert, the buyer pays only the first 25% (paragraph 5.2.1). | Appointee leaves for any reason within six months of the appointment start date: 50% refund or free replacement, at the buyer’s discretion (Schedule 1, paragraph 5.2.1). This applies to permanent appointments, fixed-term appointments and inward secondments, except where the total duration of the fixed-term appointment or inward secondment is six months or less. |
Two calculations make the staging comparable. Marshall’s final payment is $12,000 divided by the $80,000 fixed fee for that search, or 15.0%; its initial payment is $32,000 divided by $80,000, or 40.0%. These shares apply to that search only, not to all fees. MassArt’s 34% and RM6394’s 50% are printed stages. The $10,000 client service and support fee covers all three searches and is not allocated to Search 1; expenses are separate.
The payment terms differ in more than headline percentages. Marshall’s 15.0% final payment falls due within 30 days of appointment, or, where the firm presents a candidate pool first and then exercises its sole discretion to extend for up to six months from pool presentation, after that extended period if no one is placed. The clause does not address what happens if no extension is exercised. MassArt withholds its 34% on a failed search except where at least three qualified and viable candidates were proposed and MassArt hired internally. RM6394 ties its 50% to appointment and acceptance, and cancellation is paid to the point reached. A buyer comparing headline percentages alone would miss these differences.
The guarantee terms also differ in trigger, cost and remedy. MassArt covers termination or departure for any reason within one year of the appointment start date, with stated exceptions, but the employer still pays expenses plus 10% of the original fee, and the two MassArt documents disagree on whether the replacement is at no additional cost. Marshall covers voluntary and for-cause departures within one year of the candidate’s start date, not termination without cause, offers a follow-up search rather than a refund, and requires full payment first; it limits the client to one follow-up search per position. RM6394 (Lots 1-3) covers any departure within six months of the appointment start date and lets the buyer choose a 50% refund or a free replacement, but excludes fixed-term appointments or inward secondments whose total duration is six months or less.
Eight mandate choices
The second table sets out what each source says for eight choices, then separates editorial evidence requests and trade-offs from the source facts. The source column does not prove that any choice improves outcomes.
| Choice | Source-specific fact and locator | Evidence to request (editorial) | Trade-off or unresolved point (editorial) |
|---|---|---|---|
| Off-limits and conflicts | AESC lists off-limits and conflicts as terms that might be included (Standards, page 2). Korn Ferry says duration and scope are subject to negotiation or internal policies (10-K, Item 1A, page 11). Heidrick says typically not more than one year from the commencement of a search (10-K, Item 1, page 6). RM6394 bars proactive headhunting of appointed candidates the supplier sourced for a buyer for at least twelve months after placement (Schedule 1, paragraph 5.2.1); that clause covers placed candidates. | A written list of organisations treated as off-limits for this search, with durations, and a conflicts statement. | A firm with many clients may bring relationships but face wider restrictions; Korn Ferry itself says firms with a smaller client base face fewer off-limits arrangements (Item 1A, page 10). No list can be checked independently here. |
| Named team and substitution | AESC says the written agreement should name the lead advisor (page 2); no substitution rule was found. RM6394 Call-Off Schedule 7 is optional and sets named key roles, removal only on listed grounds, a ten-working-day vacancy limit, at least three months’ notice of planned replacement except in cases of death, unexpected ill health or material breach, and buyer-required removal (paragraphs 1.1 to 1.6). The schedule is not mandatory for all mandates. Call-Off Schedule 7. | Names and roles of the lead consultant and day-to-day researcher, current assignment load, and a substitution clause with notice, approval and handover. | Continuity clauses reduce the firm’s flexibility to reassign staff. Schedule 7 binds only where a buyer includes it. |
| Research universe | MassArt expects structured interviews with typically 12 to 20 long-list candidates and typically 3 to 4 finalists (Attachment 1; Addendum 1). RM6394 requires passive and active candidates to be identified and lets the buyer reject a list on diversity grounds (Schedule 1, paragraphs 6.2.2.2 and 6.2.3.2). | Target organisation list, sourcing plan, long-list and short-list sizes, and stage dates. | A wider universe takes more time and research; off-limits arrangements can narrow it. |
| Assessment and checks | MassArt asks for at least six references per finalist and coordination of third-party background checks (Attachment 1, Phase 4). Marshall’s firm does not guarantee the accuracy or completeness of third-party checks, and the client makes its own suitability determination (Articles 11.e and 11.f). | Assessment tools, number and type of references, who commissions checks, and who bears responsibility if a check proves inaccurate. | Deeper assessment adds cost and time; responsibility for third-party check accuracy can sit with the employer. |
| Fee basis and staging | Korn Ferry: generally one-third of estimated first-year cash compensation plus an indirect-expense percentage and an uptick (Note 1, page F-12). Heidrick: approximately one-third of estimated first-year compensation, indirect-expense percentage undisclosed, billed in one-third increments over three months from acceptance (Note 3, page 50). Marshall and RM6394 use fixed fees (Article 5.a.i; Schedule 1, paragraph 5.2.1). Marshall’s payment schedule footnote bases the dollar amounts on an assumed annual base salary (Article 5.d.i). | The formula and base, the indirect-expense percentage, uptick terms, the payment schedule, and treatment of cancellation and failed searches. | A percentage fee moves with the agreed pay; a fixed fee may still rest on an assumed salary, as Marshall’s footnote shows, and Marshall’s additional hire fee qualifies that cost certainty. Buyers should ask what salary assumptions apply, how adjustments are handled, whether additional hires attract a fee, and which charges are separate. |
| Guarantee | Heidrick: replacement search for performance termination within an undisclosed period (Note 3, page 50). MassArt: one year from the appointment start date, stated exceptions, expenses plus 10% (Performance Guarantee). Marshall: one year from the candidate’s start date for voluntary or for-cause departure, follow-up search, no refunds, at most one follow-up per position; see Table 1 for the fully defined conditions (Articles 11.b to 11.e). RM6394 (Lots 1-3): six months from the appointment start date, any departure, 50% refund or free replacement, excluding fixed-term appointments or inward secondments of six months or less (Schedule 1, paragraph 5.2.1). | The trigger, period, remedy, expenses payable and notice conditions. | Broader guarantees transfer risk to the firm and may be priced in; re-search remedies keep the fee with the firm. |
| Measurement and reporting | MassArt requires pipeline progress reports at least biweekly, as printed, a final search report and diversity data (Attachment 1, Phases 2 and 6). RM6394 requires service levels agreed at call-off and management information (Schedule 1, paragraphs 5.1.2 and 5.1.3). Neither firm’s 10-K reports time-to-fill, completion or success rates. | Reporting cadence and content, list composition data, stage dates, and the employer’s own follow-up of time in post. | More reporting creates work for both sides; outcome measures take months or years to observe. |
| Confidentiality and data | AESC says assignment data is owned by the search firm (Standards, page 5). Marshall treats candidate profiles and information as the firm’s confidential information for the purposes of this agreement (Article 10.c) and retains search records for a minimum of three years unless otherwise stipulated by the parties, after which they are designated for destruction (Article 9.a). MassArt requires return or secure destruction of candidate materials per the agreed data retention policy (Attachment 1, Phase 6). | Ownership of candidate data and reports, retention and destruction terms, and what the employer may keep after the search. | The unresolved editorial request is to confirm the contract-specific conditions on access, retention and reuse of candidate data. The AESC ownership statement does not settle those conditions for any particular engagement. |
Why written terms expose choices but cannot prove better outcomes
Writing terms down makes the allocation visible and checkable. It does not show that any allocation produces a better hire. No document reviewed here measures the effect of a guarantee, a staging pattern or an off-limits clause on outcomes, and neither 10-K reports cross-firm success rates. The strongest counter-reading, offered here as a constructed editorial argument rather than a quotation, is that over-specification could narrow a firm’s commercial options or shift costs into the fee, and that a strong firm may deliver regardless of contract detail. That effect is not measured here. The reasonable use of these documents is to make each choice explicit and to record what remains unresolved, not to predict quality.
A hypothetical finance-executive search
Hypothetical and editorial; no figures implied. An employer appointing a senior finance executive might ask three questions first. Which target organisations are off-limits, and for how long, given that a large firm may face wider restrictions? Who leads the search and the research, and what notice and handover apply if they change? What share of the fee falls due on appointment, and what happens if no one is placed? Each answer trades reach against continuity, or certainty of cost against risk of a failed search. The remaining choices can follow once these three are settled.
Measuring delivery
What can be measured is process and the employer’s own follow-up. MassArt’s biweekly pipeline reports, as printed, its deliverable and stage dates, and the actual composition of the candidate pool are observable during the search. After appointment, the employer can track time in post and performance itself. The UK Executive Search Playbook (Part 4, Evaluating performance: Diversity, Time in Post and Quality of Hire) suggests measures such as list diversity, dropout rates, time in post and quality of hire, but it was written for the expired RM6290 framework and should be treated as guidance for that framework, never as current RM6394 contract terms. No cross-firm success rates appear in the documents reviewed; that does not establish that none exist elsewhere.
Method and limits
This is a purposive sample of three public documents plus two firm filings and AESC standards, chosen for different jurisdictions, document types and dates. It does not test market prevalence or outcomes. Fee shares were derived from printed milestones or from printed payment amounts divided by the printed fixed fee for the same search, using unrounded amounts. Absence statements are limited to the named documents checked.