Severance

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Severance

A settlement received after being released from a corporation. In the context of corporate governance, an agreement that assures high-level executives of their postions or some compensation and are not contingent upon a change in control.

Severance

A payment often (but not always) made in a lump sum that occurs when an employee is laid off or fired. Severance is sometime voluntary; that is, an employee may choose to quit and take a severance that is offered instead of staying and risking a layoff with no severance. The amount of severance is determined by the employee's length of time at the company, previous pay rate, and other factors. Accepting a severance makes one ineligible to collect unemployment insurance or to initiate a wrongful termination lawsuit. A severance exists in order to reduce the risk of the company when layoffs become necessary and to improve employee morale.
References in periodicals archive ?
Moreover, you can share some of those savings with departing employees in the form of more generous severance benefits.
These programs couple severance benefits, such as cash payments to cover lost salary and bonuses, plus continuation of health and welfare benefits, with specific plan provisions previously described.
The federal district court in Maryland held that Lockheed violated the antiretaliation provisions of the federal discrimination laws because the use of the word "charges" implied that the receipt of severance benefits was conditioned upon the waiver of an employee's right to file an EEOC charge or otherwise participate in EEOC investigations or hearings.
Most severance benefits are paid during difficult economic times when companies can least afford the added expense.
Though not a new practice, requiring employees to give up certain rights in exchange for better severance benefits has drawn a lot of media attention.
They will also be offered transition and severance benefits.
The purpose of the meeting, the grounds for the dismissal, and severance benefits should be specified.
75 percent of the average annual qualified direct costs for SUB or severance benefits for any two of the immediately preceding seven taxable years; and
4 million in pilot severance benefits and related taxes were paid prior to December 31, 2009.
Windstream expects to incur a charge of about $15 million in the fourth quarter to pay severance benefits to affected employees.
Fitzgerald alleged in arbitration proceedings that he was denied contractual compensation and severance benefits because he would not agree to a two-year non-compete restriction, which the firms attempted to force upon him.
The award included $368,000 in unpaid severance benefits, which is on top of the $130,000 that Abraham had already received, $254,000 in attorney fees and costs, and more than $37,000 in penalties.