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 ?
The cost to councils of severance packages range from less than PS20,000 to between PS100,000 and PS150,000.
But the corporation asked it to investigate severance packages as part of the NAO's wider 2013 programme of studies, as the NAO does not have the power to carry out stand-alone studies.
News reports have put Kelly s severance package at between $2.
Malaysian transport minister Chan Kong Choy said that as part of its plan to get profitable again the airline has made an offer of severance packages to more than 18,000 employees.
When asked whether their current position included a severance package, a very high percentage (67 percent) of respondents reported that it did not.
This was my reality as a civil servant--no severance package and no pension.
A Severance packages have come under heavy scrutiny lately, particularly since many company policies on this matter are out-of-date.
However, many companies offer severance packages when they lay off workers.
Specific types of severance packages and what to expect
The number of employers who consider employment agreements when formulating severance packages increased 157% for officer level employees, 156% for senior executives, 153% for executives, and 100% for employees at the professional level.
A similar plan for severance packages for the airline's top corporate officers was rejected by the judge.
While BT has an agreement with unions not to impose compulsory redundancies, the company is said to be looking at persuading staff to leave by offering larger severance packages.