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 ?
Our work extends the review of contractual termination benefits highlighted by The Australian Financial Review (58) by undertaking a more detailed analysis of the contractual provisions featured in that article.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit and Activity (including Certain Costs Incurred in a Restructuring).
In addition, SFAS 146 points out that the recognition guidance in 1AS 37 is similar to that previously included in EITF Issue 94-3 for exit costs, with the exception of employee termination benefits.
Standards of Governmental Accounting and Financial Reporting/3-21 Scope and Applicability of This Statement/3-7 Measurement and Recognition of Termination Benefits/8-17 Measurement/9-11 Healthcare-Related Termination Benefits/9 Non-Healthcare-Related Termination Benefits/10-11 Recognition of Termination Benefit Liabilities and Expense in Accrual Basis Financial Statements/12-15 Recognition of Termination Benefit Liabilities and Expenditures in Modified Accrual Basis Financial Statements/16 Effects of a Termination Benefit on an Employer's Defined Benefit Pension or Other Postemployment Benefit Obligations/17
Smith 50 percent of his earned termination benefit of $1,200 per month ($600 per month).
EMPLOYEE TERMINATION BENEFIT PLAN WITH INCREMENTAL VOLUNTARY TERMINATION BENEFITS
Termination benefits provided to current employees that are involuntarily terminated under the terms of a benefit arrangement that, in substance, is not an ongoing benefit arrangement or an individual deferred compensation contract (hereinafter referred to as one-time termination benefits) (4)
The decrease in loss from continuing operations is due primarily to a decrease in operating expenses and recognition of the lease termination benefit.
Fourth quarter 2007 EBITDA includes a gain of $94 million associated with the merger termination benefit as well as foreign currency transaction gains of $17 million.
C) Other services: The task will also include transition of the output from current supplier and termination benefits for the transfer to the new supplier when the contract ends.
The company "expects to incur incremental cash expenditures of approximately $25 million relating to termination benefits, facility costs, employee overlap expenses and related actions.
The costs associated with the plan, the majority of which are expected to be incurred between fiscal years 2016 and 2018, will primarily consist of a reduction in headcount through reorganisation and integration, including severance and termination benefits for employees, are expected to be approximately USD 11m to USD 13m.