Severance

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Related to Severance Payments: Severance package

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 IRS ruled severance payments remain deductible business expenses, notwithstanding the U.
Thus, the IRS first examined whether the New Target severance payments resulted from Old Target liabilities assumed by New Target.
The severance payments were merely coincidental with the acquisition of T.
5 million in the second quarter of 2005 for employee severance payments and savings of approximately $1 million a quarter beginning in the third quarter of 2005.
Jane Norberg, Acting Chief of the SECs Office of the Whistleblower, added, Companies simply cannot undercut a key tenet of our whistleblower program by requiring employees to forego potential whistleblower awards in order to receive their severance payments.
A spokesman for the Welsh Government permanent secretary said: "The severance payments referred to were set in line with the UK Civil Service Compensation Scheme authorised by the Cabinet Office.
SEVERANCE payments for three senior civil servants who are leaving the Welsh Government after a management shake-up amount to around PS400,000 between them.
Supreme Court unanimously decided that severance payments made to employees who are involuntarily terminated are subject to Social Security and Medicare taxes [U.
Employers must be aware of the Supreme Court's determination of when they must withhold FICA on severance payments.
In addition, lump-sum severance payments hit a company's balance sheet and cash reserves immediately and impose a significant administrative burden.
Severance payments were paid to both men last year before the full scale of the bank's problems were known.
FOUR public servants were given severance payments worth a total of PS251,000 despite allegations of poor performance or inappropriate behaviour.