In response to the increasing attention on severance and change-in-control (CIC) arrangements as a key part of executive rewards, WorldatWork has partnered with Innovative Compensation & Benefits Concepts LLC to conduct a survey of severance and CIC practices.
Select highlights from the survey, which features the responses of 523 WorldatWork members, follow:
- The most predominant form of severance plan reported by participants (42%) was a three-tiered structure; "one plan for the CEO, one for key executives/officers, and one for all other employees".
- The most common criteria - or basis of calculation - used for severance is "years of service" (71%).
- The most common response chosen for the formulaused to determine the amount of cash severance in the plan covering the largest number of employees was "one week per year of service" (31%). (Interestingly, 40% selected "other".)
- In a CIC situation, 31% of respondents (the most popular response) indicated that all employees of their oranization would be eligible for severance.
- For the severance plan covering the largest number of employees, 42% of participating organizations provide outplacement benefits to all affected employees. 31% provide outplacement benefits, but on a case-by-case basis.
The survey report is available on a complimentary basis to WorldatWork members and available for purchase from the association for non-members.
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