Can an employee ever ASK for a severance package? (We call that “Pre-emptive Severance Request”)

Question: My small software firm was just acquired by a very large multinational company. Because the sale price for my company was so low, my stock options have become worthless. I expect an offer to stay on as a Vice President, but my preference would be to move on. I’m considering asking the acquiring company for a severance package to leave the company. I feel I am owed something for my contribution, especially since I made nothing on my stock options. Do people in my situation ever do that? Is there any precedent for that?

Chicago, Illinois

Answer: Absolutely, but not for the reasons you suggest.

First, you must understand that companies do not give people severance because they “deserve” it. Severance is not a reward for hard work, or a gift for a job well done. Nor is it charity, or a good will gesture. Severance is a payment made by an employer to an employee for one reason: to get something in return. What do you have that you could possibly give your new employer in exchange for severance? There are two categories: one is value; the other is decreased risk.

First, “value.” If your new employer believes (or could be convinced) that your remaining for a certain period of time would help them, they may be willing to pay you a significant sum of money to do so. For examples, perhaps to help teach other employees your job, or perhaps to “hold the hands” of nervous customers to convince them to stay as customers, or perhaps to help integrate the systems of the old company with the systems of the new company, or many other such things. In other words, if you represent “value” to them, if you agree to give them that “value,” they might be very willing to give you a “package” in return. It may take some “selling” to convince them you are needed, but it may not. It might be easier than you think.

Second, “risk.” If you believe that you may have some legal claim against your employer (old or new), then if you bring that to their attention, you may be offered a significant sum of money to “release” that claim in return. What kind of claims? Perhaps for failure to promote you in the past due to some discrimination you have suffered, perhaps for overtime you put in and were not paid for; perhaps for a bonus for this partial calendar year. In other words, if you represent potential “risk” to your employer due to a legal claim, if you agree to give up that claim and sign a “release” of that claim, you may be offered a severance package in return.

In summary, it is “value” and “risk” that is exchanged for severance packages in your circumstances. If you have the basis to move forward in this direction, and want to know how, look over the Severance section of our blog’s Newsletter / Q & A Library.

Want to Ask for a Severance Package Before One is Offered to You? It often makes a lot of sense. We offer a Model Letter for Proactive, Pre-Termination Request for a Severance Package. It shows you “What to Say and How to Say It.”™  To obtain a copy, just [click here.] Delivered by Email – Instantly!

Hope that helps. Good luck to you.

Best, Al Sklover

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