Exit Packages: What Senior Leaders Should Negotiate was originally published on Ivy Exec.
Many executives focus on their salaries during employment but give less attention to exit terms. Doing so can cost you later. An exit agreement should protect your income and reputation.
It should also allow you to leverage future opportunities without restrictions. After helping build an organization, you deserve fair terms when you leave.
👉 Severance Pay
Severance pay often forms the foundation of an exit package. Even when a proposal seems generous, you should still review it closely.
Some severance agreements include performance bonuses as part of executive compensation. If you helped drive results during the year you’re leaving a company, request payment for bonuses tied to completed goals. Never assume your employer will automatically include every component.
Start by reviewing how your employer calculates severance. Some offer several months of salary while others provide payment tied to tenure or role level. You may have leverage to negotiate additional months of pay, especially if you’ll support strategic changes for a while after your departure.
If you’re considering investing your severance pay, you might prefer to get it in a lump sum. You could also like structured payments over time. Each option carries unique tax and financial planning implications.
Lump sums provide you with immediate access to funds. Ongoing payments create a steady income during a job search. Weigh both options carefully with your financial advisor before accepting terms.
👉 Professional Support and Legal Costs
Navigating a high-stakes departure requires expert guidance. You’ll likely need an employment lawyer to examine the contracts.
You might also work with a tax advisor to evaluate how your severance or equity impacts your finances. These experts offer guidance to help you avoid hidden traps and missed opportunities.
Request your current employer to cover legal expenses. Many organizations agree to a set allowance to facilitate a smooth transition. Since your employer wants the paperwork finalized and all claims released, they may agree to fund your counsel to help speed up the process.
Still, don’t sign the documents before having another expert review them to verify every detail serves your best interests.
👉 Health and Welfare Benefits
Losing your health insurance can be quite stressful when you don’t have a job. Laws like the Consolidated Omnibus Budget Reconciliation Act (COBRA) allow you to keep your insurance after leaving a job. Still, it may be costly since you have to pay the full premium yourself.
Negotiate with your employer to cover the cost of insurance premiums for the duration of your severance period. They may provide these health and welfare benefits:
- Mental health counseling
- Disability coverage
- Health savings account
Keeping your family covered without a massive monthly bill allows you to focus entirely on your next career move. It might be a relatively low cost for the company, but it will offer you significant peace of mind.
As you negotiate, try to extend the benefits as much as possible until you find a job with similar benefits.
👉 Outplacement Services and Coaching
Even at the highest levels, finding a new role is time-consuming. You need high-level networking and strategy. Negotiate for a premium outplacement package to help you navigate your career journey. Some things you can ask for are:
- Networking strategy guidance
- Personal brand development support
- LinkedIn profile optimization services
Working with an executive coach can help you rebrand yourself. Their guidance will be helpful if you’re planning a career transition or want to pivot into a new role in the market. Having the company pay for a top-tier firm will eliminate the stress of finding a professional on your own.
When a company pays for high-end outplacement for an executive, it suggests the departure was professional and amicable. It shows your former employer is invested in your future success. Such a perception will be helpful during future job searches.
👉 Reputation Management and References
Your professional reputation is a valuable asset, especially at the senior leadership level. When you leave a company, you need to control the narrative.
Negotiate a mutual non-disparagement agreement. It prevents both you and the company leaders from making negative statements about each other after the separation.
Such protection matters more than many leaders realize. A single harsh comment from a former employer can spread quickly through your industry and damage your professional reputation. Before your exit, ensure the agreement covers multiple groups within the company. They include:
- Senior executives
- Board members
- Official company representatives
Failing to cover all areas can make the clause lose value. Some employees may make damaging comments, and company representatives may then distance themselves, claiming they didn’t approve the message.
It’s also crucial to secure a written letter of recommendation before your departure. Doing so protects your reputation. It gives you a strong reference when you begin looking for your next leadership role.
The letter should highlight your leadership strengths and major contributions. It may mention your role in these areas:
- Strategic planning
- Building strong teams
- Improving operations
- Helping the company grow
Highlighting clear examples helps future employers understand the value you bring.
👉 Non-Compete and Non-Solicitation Clauses
Companies sometimes try to lock down their senior leader when they leave. They might ask you to sign a non-compete agreement preventing you from working for a rival for a year or two. The goal is to protect business secrets and strategy. While some restrictions are reasonable, others may be too broad.
Signing a restrictive agreement can be a huge hurdle for your career. You need to look at these clauses closely and try to narrow them down as much as possible. If your employer restricts you from working in your industry, the company should pay you for inactivity.
Non-solicitation clauses often appear alongside non-compete agreements. These rules limit how you interact with former coworkers and clients after leaving. While reviewing your package, look at the non-solicitation rules.
Ensure these rules are fair and don’t last forever. By taking these precautions, you can gain the freedom to build your next venture. You’ll also be able to lead your next team without being tied up in lawsuits over who you called or who you hired.
Protect Your Future With a Fair Exit Package
Leaving a senior leadership role can sometimes make you vulnerable, but you still have room for negotiation. Ask for severance pay and ongoing benefits to protect your finances.
Request bonuses for goals you’ve achieved and secure reasonable non-compete rules. Including all these aspects in your exit package helps secure your financial future and job prospects.
