What's a fair severance package?

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Short answer: A fair severance package for most US employees is 2 weeks of base salary per year of service, with a 4-12 week floor depending on role. Senior leaders typically get 6-18 months. The package also includes pro-rated bonus, healthcare bridge, and equity acceleration, but companies often present only the cash multiplier as if it's the whole offer.

The benchmark by role and tenure

The cash component of a fair severance package follows a rough industry rule: 2 weeks of base salary per year of service, with floors that scale with role seniority. Below the floor, even a long-tenured employee should get a minimum threshold based on level.

Role	Floor	Per-year-of-service rate	Senior anchor
Individual contributor	4 weeks	2 weeks/year	n/a
Manager	8 weeks	2 weeks/year	n/a
Director	12 weeks	2-3 weeks/year	n/a
VP	6 months	n/a (fixed multiple)	n/a
SVP / EVP	9-12 months	n/a	n/a
C-Suite	12-18 months	n/a	Up to 24 months in some industries

These benchmarks come from employment attorney practice (Robert Burlin, Donna Ballman, Cynthia Pong have all published similar tables), executive comp surveys, and observed practice at Fortune 500 and venture-backed companies.

Worked example. A Director with 7 years at a Series C SaaS company should expect: 2 weeks × 7 = 14 weeks, or 3 weeks × 7 = 21 weeks at the higher end. Many companies open with 4 weeks. That's 250-400% below market, and the gap is entirely negotiable.

Beyond the cash multiplier

The cash severance multiple is the most visible part of the package, but it's rarely the most valuable for senior employees. A fair package also includes:

Pro-rated annual bonus through the last day worked, calculated at target
Earned but unpaid commission on closed deals
PTO payout at base salary rate (required by law in many states)
Healthcare bridge of 3-12 months (either employer-paid COBRA premiums or equivalent cash)
Accelerated equity vesting for unvested RSUs or options (6-12 months for senior leaders)
Extended option exercise window for vested options (1-10 years vs the default 90 days; this can preserve six-figure value)
Mutual non-disparagement (not just one-way)
Neutral or positive reference language in writing
Carve-outs in the release preserving SEC whistleblower, ADEA, and unemployment claims

For senior leaders, the value of equity acceleration and extended exercise windows often exceeds the cash severance by a wide margin. A C-suite executive with $500K in unvested RSUs and one year remaining on a four-year vest gains $125K from 12 months of acceleration.

Red flags that say the offer is below market

You're being offered less than market if you see any of these:

Cash severance under your role's floor (e.g., 4 weeks for a director)
No pro-rated bonus mention when you have a bonus target
No healthcare bridge or only one month of COBRA reimbursement
Zero equity acceleration for a senior role
90-day option exercise window with no extension offered
One-way non-disparagement (you can't disparage them; they have no obligation)
A release that doesn't carve out SEC whistleblower or NLRA rights
A new non-compete tacked into the severance agreement
Pressure to sign within days, not weeks (ADEA requires 21 or 45 days for employees 40+)

If two or more of these apply, the company opened low and expects a counter.

What a "fair" package looks like in practice

For a Director with 7 years at a $500M ARR private company, a fair severance package would look something like:

14 weeks of base salary (lump sum)
Pro-rated target bonus through last day
Earned commission paid per plan
6 months of employer-paid COBRA
6 months of accelerated RSU vesting
Extended option exercise window of 7 years (for any vested options)
Mutual non-disparagement
Neutral reference designated to specific HR contact, with pre-agreed language

For a VP-level executive at the same company, the package would scale to 9-12 months of base, target bonus, 9-12 months of COBRA, 12 months of equity acceleration, and full release carve-outs.

The point isn't that companies offer this on day one (they usually don't). The point is that this is what fair looks like, and the gap between the initial offer and "fair" is what's negotiable.

Sources

ADEA: 29 USC § 626(f) (release requirements for employees 40+)
IRC § 409A (severance payment timing and 409A safe harbor)
State PTO payout statutes: e.g., California Labor Code § 227.3; Massachusetts G.L. c. 149 § 148
Practitioner references: Burlin, Negotiating Your Severance Package; Ballman, Stand Up for Yourself Without Getting Fired

If you want a delivered review of your specific severance agreement against these benchmarks, with cited counter language and an email template ready to send HR, we deliver one in 24 hours for $199. See Severance Review.

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Last updated: Sun May 31 2026 00:00:00 GMT+0000 (Coordinated Universal Time)

Counteroffer is a contract analysis service, not a law firm. This page is informational, not legal advice.