Executive Severance Package Calculator: Executive Severance Pay and Exit Package Benchmarks
An executive exit is the one severance negotiation where the company expects a counter. The letter you are handed is an opening position, usually drafted from the lowest defensible reading of your agreement, and the gap between that and what your level normally gets is often several months of pay.
Coaching, not legal or financial advice.
What are you negotiating?
Your offer or current pay
Market-rate band
Talking points
Email template
Timing
Coaching, not legal or financial advice.
Direct answer
An executive severance package is usually priced as a multiple rather than weeks per year of service. Public companies commonly pay senior executives one times base salary plus target bonus, and the CEO and direct reports one to two times. Venture-backed companies more often pay six to 12 months of base to the C-suite and up to 24 months to a CEO. On a $325,000 C-suite salary at a private company, that is $162,500 to $325,000 in cash, before the prorated bonus, COBRA subsidy and equity acceleration that belong in the same counter. These are market conventions, not statistics, and this is career coaching, not legal or tax advice.
Run the numbers
Price the package to ask for, or find out where the letter you were handed actually sits.
Choose your level and whether the company is public or venture-backed, enter base salary and target bonus, and the calculator returns the cash band executives at your level are usually paid, then adds the three items that most often go unasked: the prorated bonus for the year you are leaving, a COBRA subsidy for as long as COBRA lasts, and a year of equity acceleration. Switch to the second mode to test a separation letter against the band. If the exit follows an acquisition, tick the change in control box and it runs the golden parachute test as well. Nothing you type is uploaded or stored.
Executive severance calculator
Leave it blank to use base plus target bonus as a stand-in. Your real figure is on your W-2s.
Full package to ask for
Cash benchmark for your level: , which is .
Your letter pays about
of base, against a benchmark of ().
- Cash severance, top of the band
- Prorated target bonus for this year
- COBRA paid for months
- 12 months of equity acceleration
- Total to put in the counter
Golden parachute test (26 USC 280G)
Bands are market conventions, not statistics: public companies commonly pay 1x base plus target bonus to senior executives and 1x to 2x to the CEO and direct reports; venture-backed companies commonly pay 6 to 12 months of base to the C-suite and up to 24 to a CEO. COBRA is capped at the 18 months it lasts after a termination (29 USC 1162). The 280G check applies the top federal rate of 37 percent plus 2.35 percent Medicare and leaves out state tax. This is career coaching, not tax or legal advice.
The problem
The separation letter arrives on a Thursday with a signature deadline, a figure that looks generous against what an individual contributor would get, and a release that waives every claim you might have. It is easy to sign because the number is large. It is also easy to miss that it pays six months when your peers got twelve, says nothing about the bonus you are two thirds of the way through earning, and lets a year of unvested equity lapse on your last day.
How Counteroffer handles it
Paste the separation letter or your employment agreement, and Counteroffer benchmarks the cash against your level and company type, itemizes the pieces the letter left out, picks the one number to counter with, and drafts the email to the person who can approve it. It also flags the clauses worth a closer look before you sign, such as a release that reaches further than the payment justifies. It prepares your counter; it does not negotiate with the company for you, and it does not replace an employment attorney.
The numbers
Executive severance benchmarks by level, generated by the calculator above.
Every row below runs the same formula as the calculator, on stated inputs: six months of the bonus year worked, a $2,300 monthly COBRA premium, and no equity acceleration so the cash story is not hidden behind a share price. The bands are the conventions published by compensation advisers, which is the best public reference that exists. No official US figure for executive severance is collected by any agency, so treat the ranges as the norm a board expects to hear, not a statistical average.
| Scenario | Cash band | Prorated bonus | COBRA subsidy | Full package to ask for |
|---|---|---|---|---|
| VP, venture-backed, $250,000 base, 25% bonus, 5 years | $96,154 to $144,231 | $31,250 | $15,923 | $191,404 |
| C-suite, venture-backed, $325,000 base, 40% bonus | $162,500 to $325,000 | $65,000 | $27,600 | $417,600 |
| VP, public company, $300,000 base, 40% bonus | $300,000 to $420,000 | $60,000 | $27,600 | $507,600 |
| C-suite, public company, $450,000 base, 60% bonus | $720,000 to $1,440,000 | $135,000 | $41,400 | $1,616,400 |
| CEO, public company, $800,000 base, 100% bonus | $1,600,000 to $3,200,000 | $400,000 | $41,400 | $3,641,400 |
Two things stand out. First, the prorated bonus is frequently the single largest item a separation letter omits: on the public company C-suite row it is worth more than three months of base. Second, the COBRA line stops at 18 months even where cash runs to 24, because 18 months is how long COBRA continuation lasts after a termination under 29 USC 1162. For the extra six months ask for a cash payment in lieu of coverage instead.
The stat everyone quotes
"Executives get whatever their employment agreement says, so there is nothing to negotiate."
Mostly false. The agreement sets a floor, and most exits are negotiated above it.
An employment agreement or a company severance plan tells you what you are owed if the company terminates you without cause or you resign for good reason. It does not stop the company offering more, and in practice the separation agreement you are asked to sign is a new contract with new consideration. The company wants a general release of claims, a clean transition, cooperation, non-disparagement and often a longer non-solicit. None of that is free, and all of it is what you trade for terms above the floor.
The floor is also frequently misread. Many agreements pay "base salary" when the plan document for the level above you pays base plus target bonus, or pay a prorated bonus only "based on actual performance", which a company can read as zero until the year closes. Some define good reason narrowly enough that a demotion in everything but title does not qualify. Reading your own agreement against those definitions is the first negotiation, and it usually finds room.
Where there is no agreement at all, which is common below the C-suite at private companies, everything is discretionary. That sounds weaker than it is. The company is still asking you to waive claims, and a VP with five years of tenure, a pending bonus and a year of unvested equity has several legitimate asks that cost the company very little cash this quarter.
How to do it
How to negotiate an executive severance package, step by step.
Read the agreement and the plan before you read the letter
Find three definitions: termination without cause, resignation for good reason, and what "severance" is calculated on. Then find the equity plan and your award agreements, because acceleration is often governed there rather than in the employment agreement. The letter is only credible if it matches what those documents already promise.
Price the cash against the band for your level
Use the calculator above for the convention that fits your level and company type. If the letter pays below the band, that is your headline ask. If it pays inside the band, ask for the top of it and justify the ask with tenure, the length of an executive job search, or the scope of the release.
Add the prorated bonus explicitly
Ask for the target bonus prorated for the months you worked, paid in a lump sum with the first severance installment, rather than an amount "based on actual performance" paid whenever the year closes. Actual performance can be revised downward after you have gone and have no one arguing for you.
Ask for COBRA as a company-paid subsidy
A company can pay your COBRA premiums for as long as the cash severance runs, up to the 18 months COBRA lasts after a termination. For any cash period beyond that, ask for a lump sum equal to the premium instead, since coverage cannot be extended past the statute.
Negotiate the equity separately from the cash
Ask for twelve months of accelerated vesting and an extended window to exercise vested options, because the standard 90 day window can force a large cash outlay in the worst month of your career. Equity often costs the company nothing in cash this year, which makes it the easiest yes in the whole package.
On a change in control, run the golden parachute test
If total payments contingent on a change in control reach three times your base amount, meaning your average W-2 pay over the last five years, the part above one times that base amount carries a 20 percent excise tax on you and loses the company its deduction. Ask for a best-net provision, which pays whichever of the full package or the capped package leaves you more after tax. At a private company, payments approved by more than 75 percent of the voting shareholders with full disclosure are exempt.
Negotiate the words, not just the money
Agree on the announcement language, a mutual non-disparagement clause, an agreed reference, and the title you leave with. Check the release carve-outs: vested benefits, indemnification and D&O insurance coverage should survive it. Our severance package negotiation guide lists the non-cash asks in more detail.
Send one written counter, then stop
Put every ask in a single email with the total at the top, and do not open a second round unless they come back with a partial. Executives who negotiate item by item give the company a reason to trade one ask against another. If you are over 40, you have at least 21 days to consider and 7 days to revoke under the ADEA, and those windows are yours to use.
copy and paste
The counter email that asks for the whole package in one pass.
Send this to the person who can approve the change, usually the CHRO or the CEO, after you have read your agreement and run the numbers. It works because it is specific, it ties each ask to a document or a convention, and it gives the company one decision to make instead of five.
Subject: Separation terms Hi [name], Thank you for the draft separation agreement and for handling this carefully. I want to reach a signed agreement quickly and I have a short list of changes. 1. Severance of [months] months of base salary plus target bonus, [total], in line with what is typical for a [level] at a company of our stage. 2. My [year] target bonus prorated for the [x] months worked, [amount], paid with the first installment. 3. Company-paid COBRA premiums for [n] months. 4. Twelve months of accelerated vesting on my outstanding awards and a [x] month window to exercise vested options. 5. Mutual non-disparagement and an agreed internal and external announcement. In total that is [total package]. I am comfortable with the release, the cooperation clause and the transition timeline as drafted. Happy to talk it through this week. Best, [your name]
Swap the bracketed parts for your own numbers. Counteroffer writes this for your exact offer.
Frequently asked
Executive severance questions people ask before they sign.
What is a typical severance package for executives?
Public companies commonly pay one times base salary plus target bonus to senior executives and one to two times to the CEO and direct reports, with benefits continuation for a matching period. Venture-backed companies more often pay six to 12 months of base to the C-suite and up to 24 months to a CEO, with partial bonus and some equity acceleration at later stages. These are adviser conventions rather than statistics, since no government agency collects executive severance data.
How many months of severance do executives get?
Usually six to 24 months. Six to 12 months of base is common for C-suite leaders at venture-backed companies, 12 months is common for senior executives at public companies, and CEOs commonly receive up to 24 months. Below the C-suite at private companies, where there is often no agreement, a tenure formula of four to six weeks of base per year of service is a common starting point.
Can executives negotiate severance?
Yes, and the company generally expects it. The separation agreement is a new contract, and you are asked to give a release of claims, cooperation and often longer restrictive covenants in exchange for its terms. That gives you room to ask for more cash, the prorated bonus, a COBRA subsidy, equity acceleration and agreed announcement language, even when an employment agreement already sets a floor.
Is executive severance based on base salary or total compensation?
It depends on the document, and it is one of the most valuable things to check. Public company plans often use base salary plus target bonus, while many private company agreements use base only. If your agreement says base and the plan for the level above you says base plus bonus, that difference is a legitimate ask, because it can be worth several months of pay.
Do executives get their bonus when they are terminated?
Only if the agreement or the separation terms say so, which is why it has to be asked for. The strongest version is the target bonus prorated for the months worked, paid in a lump sum. A bonus "based on actual performance" paid after the year closes is weaker, because the performance judgment is made after you have left.
What happens to my equity if I am terminated as an executive?
Under most equity plans, unvested awards are forfeited on your last day and vested options must be exercised within a short window, often 90 days. Acceleration of some unvested awards and a longer exercise window are both negotiable, and on a change in control your awards may already carry double-trigger acceleration, which vests them when a change in control is followed by a qualifying termination.
What is a golden parachute and when is it taxed?
A golden parachute is a payment contingent on a change in control. Under 26 USC 280G, if those payments reach three times your base amount, your average annual compensation over the previous five years, the portion above one times the base amount is an excess parachute payment. You owe a 20 percent excise tax on it under 26 USC 4999, and the company loses the deduction.
How long do executives have to sign a severance agreement?
If you are 40 or older and the agreement waives age discrimination claims, federal law gives you at least 21 days to consider it, or 45 days in a group program, plus 7 days to revoke after signing that cannot be shortened. Younger executives get whatever the letter states, and asking for a reasonable extension to take advice is routine.
Should an executive hire a lawyer to review a severance agreement?
For a package of this size, usually yes, and asking the company to reimburse legal fees for reviewing the agreement is a common and reasonable request. A lawyer reads the release, the restrictive covenants and the tax structure. Counteroffer does the commercial side: the benchmark, the number, the itemized counter and the email.
Is executive severance paid as a lump sum or salary continuation?
Either, and each has tradeoffs. Salary continuation keeps you on the payroll calendar and can be cut off if you breach a covenant; a lump sum is cleaner but lands in one tax year. Where payments cross a year end, the timing can change how much is withheld, which our severance pay tax calculator prices on your own numbers.
Sources
- 26 U.S. Code 280G: golden parachute payments
- 26 U.S. Code 4999: golden parachute excise tax
- 29 U.S. Code 1162: COBRA maximum coverage period
- 29 CFR 1625.22: waivers of rights and claims under the ADEA
- Meridian Compensation Partners: executive severance arrangements
- Sequoia: executive compensation 101, severance strategies
Figures are estimates and market data changes; verify anything you plan to quote in a negotiation.
What it uses
The features behind executive severance package calculator.
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Counteroffer is educational career coaching, not legal, financial, or HR advice.