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 ?
See also Chapter 59, Welfare Benefit Trusts and VEBAs, for plans that pay severance benefits from prefunded trust arrangements.
First, you may be overdue for a review of the design of your severance benefits.
However, the IRS has taken a clear position that it will not consider benefits to be severance benefits if they are payable upon termination for any reason and are not limited to types of termination normally associated with severance pay, such as early or otherwise unexpected termination.
CIC severance benefits are typically provided in one of two ways:
This amount far exceeds severance benefits enjoyed by the other peer group CEOs.
Camden National Bank has pledged not to resort to job cuts at the retail units and to provide severance benefits to all employees.
The liquidation commission was instructed to address the issue of firing personnel of the Financial Police and payment of severance benefits and other entitlements in accordance with the laws of the Republic.
Central withheld Dickens' severance benefits immediately after he was fired on Feb.
Employees will be eligible for COBRA as mandated by law, and severance benefits will be offered.
4m in pilot severance benefits and related taxes were paid prior to 31 December 2009.
The company said it is willing to discuss severance benefits for the employees, he said.
The EEOC said Allstate had adopted a hiring moratorium for a period of one year, or while severance benefits were being received, that had a disproportionate impact on workers over age 40 because more than 90 percent of the agents subjected to it were in that age group.