An employment relation may come to an end at any time and for any reasons, some proper, some not. If you are “called to the conference room,” don’t argue and don’t fret. Just remember that everything about severance is negotiable, and focus your thoughts on “The Three T’s of a Successful Transition”: Timing, Terms and Tone.

1. Timing: The First and Paramount Issue.
Of the “Three T’s of Transition,” Timing is by far the most important. The reason is that the Timing of an executive departure greatly affects all other considerations. As examples:

a. Would you rather be asked to leave that day . . . or six months from that day?

b. With more time between “notice date,” and “departure date,” the more time you have to find a new position elsewhere.

c. The later you leave, the longer you will continue to receive essential benefits.

d. If your departure is perceived by potential employers as voluntary, your perceived value to them is perceived as higher than if you have no job at present.

e. The later you leave, (i) the more time there is for vesting of unvested equity, (ii) retirement contributions to be made, and (iii) bonuses to become due, or arguably entitled to proration for partial year service.

f. At year’s end, an extension of departure date past year’s end can suggest on a resume that you were employed into another year.

Does the executive have a say in the Timing of his or her departure? Yes and No, as every negotiation depends on identification, assessment and presentation of leverage, which is primarily the job of Legal Counsel.

2. Terms: Most Common Concerns.
The Most common “Transition Terms” negotiated during discussion of Executive Severance are:

g. Salary and Benefits Continuation

h. Annual Bonus and Incentive Compensation Payment

i. Treatment of Equity and Deferred Compensation

j. Retirement Contributions and Calculations

k. Future Restrictions

l. Repayment Obligations (Sign-On Bonus, Relocation, Educational, etc.)

m. Announcements, Disseminated Internally and Externally

Each of these concerns can be successfully addressed using thoughtful analysis of leverage, best rationale for request, and wise presentation.

3. Tone:  Tone and Public Perception are Crucial .
Special care and attention need be devoted to enhance the perception on all sides that the departure is dignified, not disgraceful. There is never an advantage to harming the most important business asset of all: reputation.

There’s a lot to consider, a lot to negotiate, and a lot to memorialize with clarity and precision. And, too, there’s a lot to lose or gain. We are here to help you.