Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Senior Leaders Negotiate Their Own Severance Package
Transcript
- Lucas: Let me start with a number that always surprises me. According to a survey by outplacement firm Challenger, Gray & Christmas, roughly 40 percent of senior leaders who are laid off or pushed out never negotiate their severance package at all. Luna: Forty percent? That seems high. I'd assume at that level, everyone has an attorney or a coach in their corner. Lucas: You'd think so. But the reality is, when you're being let go, there's often a sense of failure or shame. Even at the VP and C-suite level, people just want to get out of the room. They sign the paper and move on. Luna: So what are they leaving on the table? I mean, what's actually negotiable beyond the base weeks of pay? Lucas: Quite a bit. The cash severance — usually two weeks per year of service or something formulaic — that's often the least flexible piece because companies have policies. But the accelerators, the perks, the transitions — those are where you have real leverage. Extended health benefits, outplacement services, a consulting retainer, even the right to keep your laptop and phone. Luna: A consulting retainer? That's an interesting one. How does that work? Lucas: I worked with a CFO of a mid-cap tech company — let's call her Sarah. She was being let go after an acquisition. The acquiring company had their own finance team, so her role was redundant. The standard offer was twelve weeks of severance. But Sarah had deep relationships with the company's largest customers. So she went back and said, 'I understand the transition. But for the next six months, you're going to need someone who knows the enterprise accounts. Pay me a monthly consulting fee, and I'll be available for calls and meetings.' They agreed to a six-month retainer at 60 percent of her salary. That's worth way more than twelve weeks of base pay. Luna: That's a great frame. Instead of arguing about what you've lost, you're offering a solution to a problem they'll have. It reframes the conversation from severance to transition. Lucas: Exactly. And that's the core concept here. Severance negotiation for senior leaders isn't about fighting for every dollar of the formula. It's about identifying the gaps the company will face after you leave, and positioning yourself as the bridge. Luna: What about the non-cash items? I've heard of executives negotiating things like a non-disparagement clause that goes both ways, or even a positive reference statement. Lucas: Absolutely. A mutual non-disparagement clause is standard in many separation agreements. But what I tell senior leaders is: get the company to agree to a specific, written reference statement that you can share with future employers. Something like, 'During her tenure as VP of Marketing, she led the launch of three product lines that generated $50 million in revenue.' That's gold when you're interviewing. Luna: And it costs the company nothing. It's just words on paper. Lucas: Right. And the outplacement piece — companies will often offer three months of career coaching. But you can push for six, or even twelve, if you frame it as a goodwill gesture that protects the company's reputation. No one wants a bitter former executive bad-mouthing them in the market. Luna: Let's talk about timing. When is the best moment to negotiate? Is it during the initial conversation when you're told you're being let go, or after you've had time to review the written agreement? Luna: I think the key is leverage. One of the best moments to negotiate is right after a merger or acquisition announcement. The company is in chaos. They don't want noise. You can say, 'I'm happy to help with a smooth transition. But I need a package that reflects my contribution.' Lucas: That's a window that closes fast. Once the integration team is in place, your leverage drops. So you have to move quickly. Luna: What about the emotional side? I imagine it's hard to be strategic when you're blindsided. Lucas: It's brutal. And that's the biggest reason people don't negotiate. They're in shock. My advice is: do not sign anything in the room. Say, 'I appreciate you sharing this. I need a few days to review it with my advisor.' That buys you time to get past the emotional wave and think clearly. Luna: And that advisor — should it be a lawyer, a career coach, or both? Lucas: Ideally both. An employment lawyer will catch the legal traps — like overly broad non-competes or releases that waive claims you didn't know you had. A career coach or executive recruiter can help you assess whether the package gives you enough runway for your next move. They think in terms of months of living expenses, not just weeks of pay. Luna: One thing I've noticed: a lot of executives worry that negotiating severance will burn bridges. They think, 'If I push back, they'll rescind the offer or bad-mouth me.' Is that a real risk? Lucas: It's a perceived risk, but rarely a real one. Companies have already made the decision to let you go. They want the separation to be clean and quiet. A reasonable negotiation — not a hostile one — actually signals that you're professional and thoughtful. Most HR leaders expect senior hires to have an attorney review the package. Luna: So the bar is just being reasonable. Have a clear ask, back it up with logic, and don't make threats. Lucas: Exactly. Let me give you a quick checklist. First, know the formula, but don't anchor on it. Second, identify your unique value — client relationships, institutional knowledge, a pending project. Third, propose a transition role — consulting, training your replacement, whatever. Fourth, ask for extended benefits and outplacement. Fifth, get the reference statement in writing. Sixth, have a lawyer review the release. Seventh, don't sign same-day. Luna: That's a solid list. I'd add one more: consider the tax implications. If you can structure part of the severance as a consulting fee, it might be treated differently. But that's a conversation for a CPA. Lucas: Good point. And that level of detail is why a senior leader should never go it alone. Luna: You know, this show is a resource we pour a lot of time into, and it stays ad-free thanks to listeners who chip in a few dollars at buy me a coffee dot com slash fexingo. If you've ever used one of these strategies or just appreciate having a thoughtful career podcast, that's the way to keep it going. Lucas: Yeah, it genuinely makes a difference. Even a couple of bucks helps cover hosting and research. No pressure, just if you find value here. Luna: Alright, back to the negotiation. One last thing I want to touch on: the growing trend of severance being tied to non-compete agreements. Some companies are trying to enforce non-competes by making severance contingent on signing one. How should a senior leader handle that? Lucas: That's a tough one. First, check the laws in your state. In California, non-competes are essentially unenforceable. In other states, they're more common. My general advice is: try to negotiate a carve-out. Say, 'I'm willing to sign a non-compete for six months, but I need it to be limited to direct competitors, and I need the severance to be paid regardless.' Or you can ask for a 'garden leave' clause where you're paid during the non-compete period. Luna: So you're using the severance itself as a bargaining chip to limit the non-compete's scope. Lucas: Exactly. And if the company insists on a broad non-compete with no severance, that's a red flag. Walk away and consult a lawyer before signing anything. Luna: Final thought: the best severance negotiation is the one you never need. But if you do, having a plan and a team in place can turn a painful exit into a strategic pivot. Lucas: And that's really what this show is about — helping senior leaders manage the full arc of their career, from entry to exit, and every move in between.