potential severance

[anothercog]

I was talking with my HR contact today about terminating an underperforming employee. I found out they would offer 2 months severance even though she's been on the job for less than six months. This seems pretty generous.

I then jokingly asked what I would get if I were let go (I'm about to hit my 20 year anniversary) and she said I would get at least a year salary plus one year subsidized Cobra plus immediate vesting of unvested stock.

After taxes that would be at least two years of living expenses.

I still have several years to go before pulling the trigger but that bit of news put a smile on my face today.

 

[RobbieB]

Yeah, if they fire you.

I don't think they are going to give you a year of salary when you retire -

 

[casole]

Might be time to start underperforming a bit yeah? Just kidding.. Kind of..

 

[anothercog]

Yeah, if they fire you.

I don't think they are going to give you a year of salary when you retire -

True, but one can dream! ?

I think there is a good chance they will be looking for layoff volunteers sometime in the next 10 years. Hopefully the timing works out.

 

[sheldon cornped]

The Company's severance policy will dictate what you get at any given time. And as time goes on it doesn't get better, only less lucrative (worse). So I agree with Robbie's take on it. I speak from experience and observation.....

 

[Bamaman]

To get the severance pay, the ex-employee must give the company a hold harmless agreement where they cannot be part of any litigation.

Often the severance pay is a defensive measure--for short term or long term employees. Don't think companies put out money out of the goodness of their "hearts" as it's most often a business decision.

 

[Jerry1]

My severance was tied to my non compete contract. However, even then it was a bit tricky. I only got the severance if I was let go without cause. So, as was mentioned, I was able to take advantage of a layoff (downsizing) effort and volunteered to be let go. It required some approvals from above, but my boss swung it and I was gone. Very thankful to him for pulling it off. Gave me a severance of one year salary and benefits at a time when I was going to leave anyway. So, keep an eye out but you cannot count on it even if there is policy currently existing.

 

[brett]

In our area maximum severance is generally considered to be two years. Depends on employee age, service, position. It can vary widely.

Nor is it based on straight salary. It is based on the average over three years. It includes base salary, bonuses, commissions, and benefits. Or the value of those benefits including service credit for DB entitlement.

Employers will often low ball or try to pressure a terminated employee to sign. Much better to seek legal advice.

Someone in their late fifties with some service in a senior management position with a large company can expect 20-24 months. Plus benefits and immediate vesting of outstanding stock options.

I experienced this because of downsizing. I was very aware of what packages could look like. It was a wonderful way to start early retirement.

Yes, signing a release is mandatory and it includes non disclosure of the amount, etc. Non competes no longer hold up in our jurisdictions for employees.

A few firms do salary continuance. They agree to X number of weeks or months. Regular salary checks until either the agreed to time frame has expired or the ee gets a new job.

 

[badatmath]

My employer does not give large amounts of severance unless it is a large layoff. An individual would get at most 2 weeks for being fired outside of that layoff.

 

[braumeister]

That does sound generous.
When I was in the ratrace, the standard around here was two weeks pay for every year you were with the company.

 

[Aerides]

At my mega, the severance was well known and documented. for the last few years prior to ER, once of my January activities was to re-read the policy, make a copy, and look for any changes. It was quite generous, and I was capped for the last few years.

We absolutely never gave it to someone being fired with cause, but a lot of those folks, rather than being outright fired, "found" their way onto the next RIF list. The low hanging fruit basically. Certainly prior to 2008/9, almost any name on a RIF list was...yeah that makes sense. There were small rifs every year almost, so if you had a low performer who wasn't exactly failing, but certainly wasn't ever going to be good, it was kind of expected they'd get on a list after a while.

After that though, it started getting indiscriminate. Locations, role types, consolidations - they'd displace 5 managers in a division and make them all re-apply for what would now be 2 jobs. Some decided too just not bother, and take the package.

I ended up in a situation kind of like that. I declined to apply, as I was ready to FIRE anyway, and downright giddy to make it onto the list. I left with a package of 60 weeks, full medical that whole time, prorated bonus, vacation, etc. It was lovely.

 

[brett]

At my mega, the severance was well known and documented. for the last few years prior to ER, once of my January activities was to re-read the policy, make a copy, and look for any changes. It was quite generous, and I was capped for the last few years.

We absolutely never gave it to someone being fired with cause, but a lot of those folks, rather than being outright fired, "found" their way onto the next RIF list. The low hanging fruit basically. Certainly prior to 2008/9, almost any name on a RIF list was...yeah that makes sense. There were small rifs every year almost, so if you had a low performer who wasn't exactly failing, but certainly wasn't ever going to be good, it was kind of expected they'd get on a list after a while.

After that though, it started getting indiscriminate. Locations, role types, consolidations - they'd displace 5 managers in a division and make them all re-apply for what would now be 2 jobs. Some decided too just not bother, and take the package.

I ended up in a situation kind of like that. I declined to apply, as I was ready to FIRE anyway, and downright giddy to make it onto the list. I left with a package of 60 weeks, full medical that whole time, prorated bonus, vacation, etc. It was lovely.

I know the feeling. I knew six weeks before it happened that my position would be eliminated and that I would get the package. I spent the time winding down, getting recommendations from colleagues in the business for a good lawyer to handle the negotiation. It was wonderful.

One funny thing though. I had two calls right after the event.

One from my wife who asked if I was OK. I was giddy, over the moon in fact that I was able to retire early AND have a great package. She knew that I loved my job, that I had a great employer, and worked long hours. She was not so sure that I was ready to walk away....but I was.

Minutes later HR called to see if I was OK, if I needed assistance to get home, or if I required any counseling. I had to disguise my glee and simply respond in the negative. I had delayed early retirement for 16 months in the hope that this even may transpire. And it did...touch wood.

I have been involved on the other end of numerous separation agreements. The terms have typically been a combination of company policy and past court judgements/settlements. With the latter having the greater impact. When the settlement was finally negotiated two months later it was akin to the last chapter of the book. Such a great feeling.

 

[kgtest]

Yeah, if they fire you.

I don't think they are going to give you a year of salary when you retire -

Right! My ol man was passed up for an early retiree package when he was 63 and man was he pissed seeing a few of the underperformers selected. So he proceeded to get both his knees replaced over his last two years. Used up all his PTO and then quit/retired. It was his next best strategy. He also stacked his roth and 401k with catch up contributions.

Ive been let go a couple times and never received anything beyond the gift of opportunity as I went on to better my pay, skills and life after becoming stale.