Study: Executive Severance Not So Rich

It might seem that executives who jump ship always have a golden parachute, but that's not the case, according to a global study on the topic by Right Management Consultants, Philadelphia. "The huge golden parachute packages worth millions of dollars have generated a great deal of media coverage," says Geof Boole, executive vice president of Right's Career Transition Line of Business. "But the fact is that 55% of the companies we surveyed around the world place a cap on severance payments, even at the top levels of their organizations." Right surveyed 1,500 companies in 32 countries. Among the most aggressive in limiting severance payments were companies in the United States, where 57% said they place caps on payments, and Canada, where 60% said the same. Overall, companies most often reported giving one month's severance for each year worked (25.7%). In the United States, 12% of employers give executives a month of severance for each year worked. In Canada, more than half grant at that level; 36% in Brazil do so; and 33% of French companies. About 44% of respondents said they give one or two weeks per year worked. In addition to pay, the most commonly offered benefits to departing executives were continuation of medical benefits (66%), outplacement (58%) and continuation of life insurance (31%).