Cost-value graph on blackboard

WHAT IS REASONABLE SEVERANCE?

May 27th, 2018 Posted by

Employees always ask me, “What constitutes reasonable severance?”  There is no black and white answer to this question.  That is because there is no magic formula that dictates what amount of severance you may ultimately receive if you are willing to negotiate for more.

In evaluating whether the initial amount of severance offered to you is reasonable (or fair) and how much more you might ask for there is a standard most professionals look to: one to two weeks per year for assistants, two to three weeks per year for mid-level managers and vice presidents, three to four weeks per year for senior vice presidents and four weeks or more per year for C-Suite executives.  However, these standards are nothing more than a starting point.  The amount of severance one can obtain is highly negotiable and will depend in large part on a variety of factors such as the financial size and benefit policies of the employer, your individual needs, the reason for your termination (i.e., were you terminated in violation of a contract or due to discrimination, etc.), the obligations you are being asked to assume (i.e., non-compete, future cooperation), the length of your tenure, and your individual needs (i.e., serious health issues).  It may also be as simple as the fact that you are well liked by the person(s) making the decision.

One thing is for certain, you will never know how much your severance can be unless you ask.