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 ?
Last night, he added: "I have instructed the trust to withhold any severance payment to the former chief executive of Maidstone and Tunbridge Wells NHS Trust, pending legal advice.
Under the agreement, the executives would receive USD45m in severance payments if they resign.
As of May 31, 2001 a total of 600 people took advantage of severance payment offers.
Earlier enraged Fianna Fail chief Micheal Martin accused Fine Gael of hypocrisy for campaigning on severance payments and pensions, while their boss took pension entitlements for 13 years while he was a TD.
He said: "The current arrangements for severance payments were in place for previous governments, including when the current leaders of Fine Gael and Labour ceased to be ministers.
The company's termination and severance payment policy is consistent with the company's desire to attract and retain key executives.
The maximum severance payment for school superintendents is 18 months' salary, which would have cost the district $162,000, nearly double Parker's compensation.
Kurinsky, in exchange for a severance payment, issuance of a promissory note and the continuation of certain benefits.
Some council members do not support any severance payment to the chief, while others have said they might support paying the chief a year's salary - $173,000.
A portion of the aggregate severance payment may be attributable to reasonable compensation for the covenant.
27, when he received his severance payment, the company said.
Because the terminated employee had made no tort-like claims against his employer before signing the release, the severance payment could not be excluded from gross income under Sec.