Severance Pay

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Dictionary Says

Definition of 'Severance Pay'

The compensation that an employer provides to an employee who has been laid off, whose job has been eliminated, who through mutual agreement has decided to leave the company, or who has parted ways with the company for other reasons. Typically, severance pay amounts to a week or two of pay for every year that the employee was with the company. Executives may receive a month's pay for each year of service and senior executives generally receive severance pay as outlined in the employment contract. In addition to pay, severance packages can include extended benefits, such as health insurance and outplacement assistance to help the employee secure a new position.
Investopedia Says

Investopedia explains 'Severance Pay'

Not all companies provide severance pay to employees upon termination and those that do may not provide severance pay to all employees. Severance pay is typically issued on a case-by-case basis and as dictated by any employment contracts in place during hiring. No law requires employers to provide severance pay; however, the Fair Labor Standards Act (FLSA) mandates that an employer must pay the employee whose employment has been terminated through their last day of work and any vacation time that the employee has accrued. If severance pay is received, any unemployment compensation to which the individual is entitled will be accordingly reduced.
Search results for

'Severance Pay'

  • If I take a severance package from my employer, how will it be ...

    http://www.investopedia.com/ask/answers/08/severance-pay-tax-rate.asp
    ... For related reading, see Negotiating Severance Agreements ... is under your company name
    and you want to sell it back to yourself, do you have to pay capital gains ...

  • The Layoff Payoff: A Severance Package

    http://www.investopedia.com/articles/pf/08/negotiating-severance-agreements.asp
    ... should consider negotiating the following terms: The severance pay offered
    is typically one to two weeks for every year worked. ...

  • Putting Management Under The Microscope

    http://www.investopedia.com/articles/stocks/05/050205.asp
    ... 1999 until she was ousted in Feb 2005, Fiorina took home more than $16 million in
    non-stock pay. ... And finally, her severance package was worth about $21 million ...

  • Find Secure And Affordable Post-Work Health Insurance

    http://www.investopedia.com/articles/retirement/07/retirement_healthcare.asp
    ... negotiate for a severance or retirement-sweetener package that includes continued
    health-insurance coverage for a period that matches severance-pay duration. ...

  • No Mercy For Newspapers

    http://stocks.investopedia.com/stock-analysis/2009/No-Mercy-For-Newspapers-GCI-NYT-WPO0305.aspx
    ... For the fourth quarter, the company earned 69 cents per share versus $1.06 in Q4
    2007. Adding back the severance pay charges, the EPS would have been 85 cents. ...

  • Moral Hazards: A Bump In The Contract Road

    http://www.investopedia.com/articles/financial-theory/09/moral-hazard-conflict.asp
    ... If an executive's contract includes an annual salary and severance pay for departure,
    they will be paid as long as they are with the firm and after they leave. ...

  • Professionals - Careers | Investopedia

    http://www.investopedia.com/professionals/careers/
    ... Read More »; Associate In Premium Auditing - APA. Read More »; Severance Pay. Read
    More ». View All. Stock Analysis. US Initial Jobless Claims Signal A ... ...

  • Professionals - Careers | Investopedia

    http://www.investopedia.com/professionals/Careers
    ... Read More »; Associate In Premium Auditing - APA. Read More »; Severance Pay. Read
    More ». View All. Stock Analysis. US Initial Jobless Claims Signal A ... ...

  • O'Neal Bails Out, $161m Parachute Will Break His Fall

    http://stocks.investopedia.com/stock-analysis/2007/ONeal_Bails_Out_161m_Parachute_Will_Break_His_Fall_MER.aspx
    ... Don't feel too bad for O'Neal. He didn't simply walk away with a handshake and
    two weeks severance pay. That's not the way Wall Street works. ...

  • Mergers And Acquisitions: Understanding Takeovers

    http://www.investopedia.com/articles/01/050901.asp
    ... Benefits written into the executives’ contracts include items such as
    stock options, bonuses, liberal severance pay and so on. ...

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