Leverage starts with what the company needs from you
A severance agreement is an exchange. In most cases the company is paying for a signed release of claims. It may also want an orderly handover, continued relationships with key clients or investors, quiet during a deal or a board transition, and your cooperation later. Each of those has value, and each is a reason to ask.
Leverage is also shaped by the record. If you raised concerns about misconduct, took protected leave, or were treated differently from peers before the decision, that history matters. So does timing: a departure near a financing, earnings release, acquisition, or leadership change is one the company usually wants handled cleanly.
Read your documents before you respond
- Your offer letter or employment agreement, especially the definitions of "cause" and "good reason."
- Any executive severance plan or change-in-control agreement.
- Your equity plan and each grant agreement: vesting, acceleration, and the post-termination exercise window.
- Your bonus plan: whether a partial-year bonus is earned, discretionary, or forfeited.
- Any restrictive covenants you already signed: non-compete, non-solicit, confidentiality, invention assignment.
Those documents often decide what you are already owed. Severance is what the company offers beyond that, and it is where the negotiation happens.
What is on the table besides cash
- Cash: amount, lump sum versus salary continuation, and payment timing.
- Bonus: a prorated or full current-year bonus, and payment of any bonus already earned.
- Equity: accelerated vesting and a longer exercise window. Extending an incentive stock option's exercise period past three months after employment ends can change its tax treatment, so involve a tax advisor.
- Benefits: company-paid COBRA premiums for a defined period.
- Timing and title: the separation date, a garden-leave period, and whether the exit is described as a resignation.
- Reputation: the internal and external announcement, an agreed reference, and mutual non-disparagement.
- Restrictive covenants: narrower scope or duration, or a release from a non-compete.
- Protection: confirmation that indemnification and D&O insurance coverage continue for your time as an officer.
- Support: outplacement, and reimbursement of legal or tax review fees.
Timing rules that matter
You rarely have to sign on the day you receive the agreement. If you are 40 or older and the agreement releases age discrimination claims, federal law generally requires at least 21 days to consider it (45 days if it is part of a group program) and 7 days after signing to revoke. If you are under 40, there is no federal minimum, but asking for reasonable time to review is normal and usually granted.
Keep in mind that an offer can usually be changed or withdrawn until it is signed. Respond professionally and within the timeline, and put your requests in writing.
How to ask
Make one consolidated counterproposal rather than a string of separate asks. Tie each request to a business reason: a transition that protects clients, a timeline that fits the board calendar, an announcement that protects both reputations. Keep the tone steady. The person across the table is often someone you will want as a reference later.
What not to do
- Do not sign in the room, and do not resign before you understand your options.
- Do not take company documents or data. Keep your own notes and your own compensation records.
- Do not criticize the company or its leaders to colleagues, clients, or on social media while terms are open.
- Do not miss deadlines in the agreement or in your equity plan.