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 welcome the Severances received in Boston was considerably warmer.
The Severances' California dream centered on the purchase of a ranch in partnership with their two eldest children.
James Seymour had been the first of the Boston Severances to go west--for reasons of health.
was gratified that his confidants were not "backward" in admitting to their envy of the Severances' opportunity to experience California's "climate and the trip over, with all their variety & charms...." (43)
Five or so years after they had returned to Boston, the Severances had begun to consider the possibility of relocating to America's western frontier.
Employees who accept the severance could receive a cash payout, or payments that they would use to pay for health insurance, or a combination of both, Hammitt said.
A worker with one to five years experience, for example, would receive severance valued at up to 10 percent of their yearly salary.
The severance de-partures would affect several departments, including the finance division, which helps put together the city budget and does financial analyses.
* Jill Barad, former CEO of Mattel, stepped down with a severance estimated in the range of $37 million.
* Bob Annunziata walked away from the CEO post at Global Crossing after just one year with $15.9 million in severance.
* Durk Jager lasted just 17 months at the helm of Procter & Gamble but left with severance pay of $9.5 million.
These critics suggest two real reasons for huge severance payouts:

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