Reviewed by Greg Mansell
The most common question executives ask after a termination is simple: can I get more? In most cases the answer is yes, but not because companies are generous. Severance is a negotiated exchange, and the number moves when the executive can show the company that a better deal is in its interest too.
Why Severance Is Usually Negotiable
New York does not generally require employers to pay severance. When a company offers it, the company is buying something: a release of claims, cooperation, confidentiality, and often a non-compete or non-solicit. The more valuable those things are to the company, and the more risk it avoids by securing them, the more room there is to negotiate.
What Actually Moves the Number
- Your contract. Severance multiples, good reason clauses, notice periods and change in control provisions can entitle you to more than the first offer reflects.
- Equity and bonus. Forfeited RSUs, unvested options and a lost annual bonus are often the largest numbers in play, and continued vesting or a cash substitute can be negotiated.
- Potential legal claims. Evidence of discrimination, harassment, retaliation or whistleblower retaliation changes the company’s risk calculation and often its offer.
- Restrictive covenants. If the company wants to enforce a non-compete, that restriction has a price. If it does not, a waiver may be easy to secure.
- Timing and cooperation. Transition help, a quiet departure during a sensitive period, or a smooth handoff of key relationships all have value.
What Does Not Move the Number
Emotional appeals, threats without a factual basis, and negotiating directly with a former boss rarely improve an executive package. A measured, document-based presentation through experienced counsel generally produces better results and protects your professional reputation.
Terms Beyond Cash
Strong packages often include more than additional weeks of pay: a prorated or full bonus, continued vesting, extended option exercise periods, company-paid COBRA, agreed announcement language, references, mutual non-disparagement, a narrowed non-compete, outplacement, and reimbursement of legal fees. A release should also carve out vested benefits and your rights to indemnification and D&O insurance coverage.
Watch the Fine Print
Clawback provisions, cooperation clauses without compensation, broad confidentiality terms and one-sided non-disparagement obligations can quietly reduce the value of a deal. New York law also restricts certain confidentiality terms in agreements resolving discrimination and harassment claims. Have the full agreement reviewed, not only the dollar amount.
For a detailed look at the process, see Executive Severance Negotiation and our guide to the negotiability of severance agreements in NYC.
Get Advice Before You Sign
Mansell Law represents executives in New York City and nationally in severance negotiations, equity disputes and unlawful termination claims. For a confidential consultation, call (646) 921-8900 or contact us online. Learn more about our representation of executives.
This article provides general information, not legal advice, and does not create an attorney-client relationship.