Here are some of my Do’s and Don’ts for Getting the Most Out of Your Severance Package:
Don’t accept your severance package immediately; take your time and consider it. Companies cannot retract their severance agreement just because you need more time. As a rule keep your response time to three weeks or less. You don’t want to delay your human resources personnel in their quest to “get things moving along” but at the same time you absolutely do not want to lose money in your separation agreement negotiations.
Do consider negotiating extended pay, more benefits, and other incentives. One of the areas that I feel you should ask for is for the kind of personalized outplacement services offered by companies like Career Pro Inc. vs. the big outplacement alternatives generally offered by the big companies.
Do consider hiring a career advisor and an employment law attorney who represents clients like you (not your employer). Do you want to release your rights just because your human resources manager has now become a bad used car salesman?
Do try to work through your human resources department before formally bringing in your attorney. If you formally bring in your attorney you might face the company’s corporate legal department and that could be costly.
Do ask for a strong severance package even if you are in an “at-will” employment state. Companies must perform terminations legally even if you live in an at-will state. They also want good PR when terminations occur. Ignoring this fact will lose you money and severance package advantages you could obtain.
Here are a few more questions that executives should consider when they sit down with their career advisor and attorney:
What has the company recently provided to similar, terminated employees?
What bonuses and commissions am I entitled to after I leave the company?
What can I expect from my stock options and how will this impact vesting expectations? How much time will I have to exercise my vesting shares? Think about getting your career advisor, attorney and accountant on this task.
Don’t forget that your Separation and Release Agreement signature has value!