Top 5 Opportunities, Top 5 Mistakes, and the Strategies Executives Use to Maximize Their Severance
By Matthew J. Ruggles
“The biggest mistake employees make during severance negotiations isn’t asking for too much. It’s assuming they have nothing to negotiate.”
You Didn’t Spend Twenty Years Building Your Career to Negotiate Its End in Twenty Minutes.
Picture this.
It’s 9:00 a.m. on a Tuesday.
Your calendar shows a meeting titled, “Quick Check-In with HR.”
Fifteen minutes later, you’ve been informed that your employment is ending. The HR representative slides a professionally drafted severance agreement across the table, thanks you for your years of service, and says something reassuring like:
“Take a few days to review it and let us know if you have any questions.”
If you’re like many executives, professionals, physicians, sales leaders, or highly compensated employees, your mind immediately starts racing.
Is this a fair severance package?
Can I negotiate it?
If I ask for more, will they pull the offer?
Should I hire an attorney—or will that just make things worse?
Those are exactly the right questions.
Unfortunately, many employees answer them incorrectly.
After practicing employment law for more than thirty-one years, including approximately twenty-five years representing employers before devoting my practice exclusively to representing California employees, I’ve participated in hundreds of severance negotiations from both sides of the conference table.
That experience has taught me something most employees never get the opportunity to learn.
Employers rarely evaluate severance negotiations the way employees think they do.
Employees often believe severance is a reward for loyalty.
Employers generally view it as a business transaction.
That distinction matters.
Because once you understand why employers offer severance in the first place, you begin to understand how to negotiate it.
And sometimes, that difference is worth far more than another week or two of salary.
Why Employers Really Pay Severance
One of the biggest misconceptions I hear is:
“They’re offering severance because they appreciate everything I’ve done.”
I certainly hope they appreciate your contributions.
But appreciation usually isn’t why severance exists.
In reality, employers frequently offer severance because they receive something valuable in return.
Typically, they are purchasing some combination of:
- a release of legal claims;
- confidentiality;
- non-disparagement obligations;
- cooperation after separation;
- protection of customer relationships;
- certainty instead of litigation;
- business continuity;
- protection of company reputation.
That’s an entirely different conversation.
Think about it this way.
Companies negotiate acquisitions.
They negotiate executive compensation.
They negotiate leases.
They negotiate vendor agreements.
They negotiate commercial lawsuits.
Why would anyone assume the agreement ending your employment is the one contract they refuse to negotiate?
It usually isn’t.
The better question isn’t:
“How much do they like me?”
The better question is:
“How much uncertainty are they trying to eliminate?”
That’s where negotiating leverage begins.
If you want to understand when an employee has leverage to negotiate a bigger severance deal, read my post: When Do I Have Legal Leverage for a Bigger Severance Deal?
Matt’s Insider Perspective
One of the greatest advantages I bring to severance negotiations is that I spent decades representing employers before switching sides.
I know how management discussions typically occur after an executive termination.
I know what concerns general counsel.
I know what HR can approve—and what usually requires executive or legal approval.
Most importantly, I know that employers often evaluate severance negotiations very differently than employees imagine.
That perspective frequently changes the entire negotiation.
Why the First Severance Offer Is Rarely the Best Offer
One of the most expensive assumptions employees make is believing:
“This must be their final offer.”
Usually, it isn’t.
In many organizations, HR expects sophisticated employees to negotiate.
Not every request will succeed.
But many employers intentionally leave themselves room to improve the offer if circumstances justify doing so.
Sometimes that improvement involves:
- additional salary continuation;
- bonus eligibility;
- COBRA contributions;
- accelerated commissions;
- additional equity vesting;
- extended stock option exercise periods;
- consulting arrangements;
- neutral reference language;
- revised non-compete or non-solicitation provisions;
- mutual non-disparagement agreements.
For executives, those issues can easily exceed the value of several additional months of salary.
If you want to understand how to ask for more severance pay in California, read my post: How to Get More Severance Pay in California
Ironically, many people negotiate harder over purchasing a new vehicle than they negotiate over a six-figure severance agreement.
No one walks into a luxury automobile dealership announcing,
“I’ll happily pay the sticker price. No need to negotiate.”
Yet intelligent executives do essentially the same thing with severance packages every day.
It’s understandable.
Termination is emotional.
Negotiation is uncomfortable.
But that doesn’t mean the opportunity doesn’t exist.
The Psychology Behind Successful Severance Negotiations
Employees often assume the negotiation revolves around proving the employer acted illegally.
That’s usually not how experienced employment attorneys approach the discussion.
Instead, we ask different questions.
Does the employer face uncertainty?
Could reasonable people disagree about what happened?
Would defending the termination require substantial management time?
Will witnesses remember events differently?
Is there documentation that helps—or hurts—the employer?
Could a jury interpret the facts differently than management does?
Notice something.
None of those questions require certainty.
They require risk.
Employers routinely make economic decisions based on risk.
Severance negotiations are no different.
One of the biggest misconceptions employees have is believing they need a guaranteed winning lawsuit before negotiating additional severance.
That’s simply not true.
Many of the strongest severance negotiations occur long before anyone files a complaint in court.
Sometimes the most valuable lawsuit is the one that never has to be filed.
Do California Laws Matter During Severance Negotiations?
Absolutely.
Although every situation is unique, California law provides significant protections for employees in areas including discrimination, retaliation, disability accommodation, medical leave, whistleblower activity, earned wages, commissions, and final pay.
Depending on the circumstances, laws such as the Fair Employment and Housing Act (Government Code section 12940), Labor Code sections 201–203, Labor Code section 1102.5, Labor Code section 98.6, Labor Code section 6310, and other California employment statutes may influence the parties’ evaluation of legal risk.
That doesn’t mean every termination violates California law.
Far from it.
But when legitimate legal questions exist, employers often become more interested in resolving those questions through negotiation rather than litigation.
The key is identifying which facts actually matter.
That’s where experience makes a difference.
Should You Even Negotiate?
Before we discuss the best opportunities for negotiation, here’s a quick reality check.
Not every severance agreement should be negotiated.
Sometimes the employer has offered an objectively fair package.
Sometimes there are no meaningful legal issues.
Sometimes the costs of negotiation outweigh the potential benefit.
The point isn’t to negotiate every agreement.
The point is to know whether your agreement is negotiable before you sign away valuable legal rights.
If you want to understand what a California executive severance agreement usually involves, read my post: Executive Severance Negotiation Mistakes and How to Avoid Them
That distinction alone has saved many clients from making expensive decisions.
Executive Severance Negotiation Scorecard
Before signing your severance agreement, ask yourself the following questions.
| Question | Yes | No |
| Were you terminated after years of positive performance? | □ | □ |
| Did new leadership recently arrive? | □ | □ |
| Were you on medical leave or requesting accommodations? | □ | □ |
| Did you recently complain about discrimination or retaliation? | □ | □ |
| Does your compensation include commissions, bonuses, or equity? | □ | □ |
| Are you earning more than $150,000 annually? | □ | □ |
| Are you being asked to sign a broad release of claims? | □ | □ |
If you answered “Yes” to several of these questions, it may be worthwhile to consult an experienced California employment attorney before signing.
Top Five Opportunities to Negotiate a Better Severance Package
Not every termination creates equal negotiating leverage.
Some situations consistently produce stronger negotiation opportunities than others.
Here are the five circumstances I see most often.
Opportunity #1: The “Performance Problem” That Appeared Out of Nowhere
If I had to identify the single situation that most consistently produces successful severance negotiations, this would probably be it.
You’ve worked for the company for years.
Strong performance evaluations.
Raises.
Bonuses.
Promotions.
Positive client feedback.
Leadership responsibilities.
Then suddenly…
Everything changes.
You’re told your communication isn’t effective.
Your “executive presence” is lacking.
You aren’t collaborative enough.
Leadership has “concerns.”
No one can identify when those concerns first arose.
No one documented them previously.
No meaningful coaching occurred.
No progressive discipline.
No performance improvement plan.
Yet somehow you’re suddenly considered a poor performer.
Does that automatically mean the termination was unlawful?
No.
But it certainly raises questions.
Experienced employment attorneys immediately begin asking:
- Why now?
- What changed?
- Was there a new CEO?
- A new private equity owner?
- A reorganization?
- Medical leave?
- A complaint to HR?
- An expensive salary?
- A disagreement with new leadership?
- A whistleblower issue?
- A personality conflict?
Sometimes employers legitimately conclude that an executive is no longer meeting expectations.
That happens.
But sometimes “performance” becomes the explanation after the decision to terminate has already been made.
Those are two very different situations.
Common Indicators of Possible Pretext
Although every case is unique, several facts appearing together deserve closer examination.
For example:
- Years of strong reviews followed by a sudden decline.
- Vague criticisms without measurable examples.
- No coaching.
- No written warnings.
- Different managers giving different explanations.
- Replacement by someone younger or significantly less expensive.
- Termination shortly after protected medical leave.
- Termination shortly after reporting discrimination or harassment.
- Shifting explanations during the termination process.
One fact alone proves very little.
Several together may substantially increase negotiating leverage.
Executive Case Study #1 (Illustrative)
A Vice President of Sales had received outstanding evaluations for nearly eleven years.
Six weeks after a new Chief Revenue Officer arrived, he was told his leadership style “no longer aligned with company culture.”
No prior coaching.
No documented performance deficiencies.
No written discipline.
Instead of immediately signing the severance agreement, he consulted counsel.
The negotiation ultimately resulted in:
- additional severance pay,
- continued bonus eligibility,
- COBRA reimbursement,
- revised reference language,
- and a consulting agreement that softened the transition.
No lawsuit was ever filed.
The negotiation remained entirely professional.
Matt’s Insider Perspective
One advantage of having represented employers for approximately twenty-five years is recognizing how termination decisions are actually made.
Very few employers announce,
“We’re terminating you because of your age.”
Or,
“Because you requested medical leave.”
Instead, discussions usually revolve around business language.
The real question becomes whether the business explanation is consistent with the facts.
Sometimes it is.
Sometimes it isn’t.
And employers often recognize that uncertainty before employees do.
Opportunity #2: Executive Restructuring and Leadership Changes
Not every termination involves alleged poor performance.
Sometimes your job simply disappears because someone else has a different vision.
A new CEO arrives.
Private equity acquires the company.
A merger closes.
A new division president wants “their own leadership team.”
These situations frequently produce excellent severance negotiations because neither side necessarily needs to argue about blame.
The company may genuinely appreciate your contributions while believing someone else better fits its future strategy.
That makes the negotiation much less emotional.
Instead of debating fault, the conversation becomes:
“What is a fair business solution?”
Those are often productive discussions.
Executive Issues Frequently Worth Negotiating
Many executives focus only on salary continuation.
That’s a mistake.
A sophisticated severance negotiation frequently involves:
- annual bonuses,
- long-term incentive compensation,
- commissions,
- RSUs,
- stock options,
- equity vesting,
- deferred compensation,
- COBRA payments,
- executive outplacement,
- consulting opportunities,
- separation dates,
- mutual non-disparagement,
- neutral references,
- confidentiality language,
- restrictive covenant modifications.
Sometimes those issues exceed the value of the salary continuation itself.
If executive compensation, equity, or transition terms are part of the severance discussion, read my post: How to Negotiate Executive Severance Agreements
Executive Case Study #2 (Illustrative)
A Chief Financial Officer remained employed following a private equity acquisition for approximately nine months.
Eventually the new ownership group decided to install its own finance leadership.
Nobody questioned the CFO’s competence.
The decision was strategic.
Because both parties wanted a professional transition, the severance negotiations focused on business objectives rather than accusations.
The final agreement included:
- increased salary continuation,
- accelerated vesting of equity,
- continuation of executive benefits,
- positive reference language,
- consulting compensation for transition assistance.
Again…
No litigation.
Simply thoughtful negotiation.
Matt’s Insider Perspective
Executives sometimes hesitate to negotiate because they fear appearing difficult.
In reality, experienced executives negotiate significant business agreements every day.
Boards negotiate.
Investors negotiate.
Companies negotiate.
Professional severance negotiations are simply another business negotiation.
Conducted professionally, they rarely damage an executive’s reputation.
Opportunity #3: Medical Leave, Disability, and Accommodation Issues
California law provides substantial protections for employees dealing with disabilities, medical conditions, pregnancy, and protected leaves of absence.
Again…
That does not mean every employee terminated after medical leave has a legal claim.
But timing matters.
Suppose an executive:
- requested a reasonable accommodation;
- underwent cancer treatment;
- returned from medical leave;
- required intermittent leave;
- disclosed work restrictions;
- requested modified duties;
- or experienced a temporary disability.
Then shortly afterward…
Performance supposedly becomes unacceptable.
That sequence deserves careful evaluation.
California employers understand that disability accommodation and leave issues are governed by extensive legal requirements.
Whether those obligations were fully satisfied often influences the parties’ evaluation of litigation risk.
If you want to understand termination after medical leave or temporary disability, read my post: [Terminated While Temporarily Disabled].
Executive Case Study #3 (Illustrative)
A technology executive underwent surgery and returned to work under temporary restrictions.
Within three months, she was informed that her leadership effectiveness had declined and she was offered severance.
After reviewing the timeline, documentation, and accommodation history, counsel identified several issues worth discussing.
The parties ultimately resolved the matter through a significantly enhanced severance agreement.
No complaint was filed.
The executive accepted another leadership position within weeks.
Matt’s Insider Perspective
One of the biggest mistakes employees make is assuming:
“The company never mentioned my medical condition, so it couldn’t have mattered.”
Sophisticated employers rarely discuss protected characteristics directly.
Instead, experienced employment attorneys evaluate the entire sequence of events.
Sometimes timing alone tells an important story.
Opportunity #4: Discrimination, Retaliation, and Protected Activity
California law protects employees who engage in many forms of protected activity.
For example, employees who report discrimination, oppose harassment, complain about wage violations, report safety concerns, or engage in other protected conduct may have additional negotiating leverage if adverse employment actions closely follow those activities.
The issue is rarely whether the employer openly admits retaliation.
It almost never does.
Instead, experienced attorneys evaluate:
- timing,
- documentation,
- consistency,
- comparative treatment,
- witness credibility,
- and whether the employer’s explanation has remained consistent.
Employers understand that retaliation claims frequently depend upon circumstantial evidence.
That uncertainty often influences severance negotiations.
If you want to understand how a safety complaint can affect a sudden termination, read my post: [Safety Complaint, Then a Sudden Termination].
Emotional Leverage vs. Legal Leverage
Employees naturally want to say:
“After fifteen years, this is how you treat me?”
Perfectly understandable.
Unfortunately…
That usually isn’t persuasive.
Legal leverage sounds different.
It sounds like:
“There are several factual and legal issues that both parties may benefit from resolving privately.”
One appeals to emotion.
The other appeals to business judgment.
Guess which conversation employers are more likely to take seriously.
Opportunity #5: Why Layoffs Are Actually the Hardest Severance Negotiations
This surprises nearly every executive I meet.
People assume layoffs are easy to negotiate.
In reality…
They’re often the hardest.
Why?
Because layoffs almost always involve formulas.
Two weeks per year of service.
Eight weeks for directors.
Twelve weeks for executives.
Whatever the formula happens to be, employers generally want consistency.
Consistency reduces complaints.
Consistency reduces discrimination claims.
Consistency simplifies budgeting.
Consistency makes HR’s job much easier.
That means convincing an employer to depart from the formula requires something more than simply wanting additional severance.
The question becomes:
What makes your situation different from everyone else’s?
That’s exactly where experienced counsel can often make a meaningful difference.
If you want to understand whether severance is really non-negotiable, read my post: Non-Negotiable Severance in California: 5 Myths Dispelled by a Lawyer
Comparison Table: Where Is Negotiating Leverage Usually Strongest?
| Termination Scenario |
Negotiating Opportunity |
Why |
| Sudden “Performance” Issue | ★★★★★ | Possible pretext and factual uncertainty |
| Executive Reorganization | ★★★★★ | Business transition rather than misconduct |
| Disability or Medical Leave | ★★★★☆ | California legal protections may increase risk |
| Retaliation/Protected Activity | ★★★★☆ | Timing and documentation frequently matter |
| Large Reduction in Force | ★★☆☆☆ | Standardized severance formulas make exceptions harder |
Before You Sign…
Ask yourself one simple question.
If your employer believed this agreement was important enough to have lawyers draft it…
Why wouldn’t you want an experienced California employment attorney evaluating it before you permanently release valuable legal rights?
The answer may ultimately be:
“This is an excellent severance package.”
Or…
“This package can be significantly improved.”
The important thing is discovering which answer applies before you sign—not after.
Top 5 Mistakes Executives Make When Negotiating Their Own Severance
One of the most rewarding parts of my practice is helping executives obtain substantially better severance packages than the ones initially offered.
One of the most frustrating?
Meeting someone the day after they signed.
I cannot tell you how many consultations begin with the same sentence:
“I wish I had called you before I signed.”
Usually, they’re right.
By the time the agreement has been signed—and any applicable revocation period has expired—the negotiating leverage that existed only days earlier may have disappeared.
That doesn’t mean every employee needs an attorney.
Some severance agreements are perfectly fair.
Some employers genuinely make generous offers.
Some situations simply don’t justify spending money on legal advice.
But every executive deserves to know whether there is leverage before giving up valuable legal rights.
Here are the five mistakes I see most often.
Mistake #1: Assuming the First Offer Is the Best Offer
This is easily the most common—and often the most expensive—mistake.
Employees frequently assume:
“This must be the company’s final offer.”
Usually, it isn’t.
Think about virtually every significant business transaction you’ve ever participated in.
Companies negotiate:
- executive employment agreements;
- acquisitions;
- vendor contracts;
- commercial leases;
- financing arrangements;
- litigation settlements;
- licensing agreements.
Negotiation is how sophisticated organizations conduct business.
Severance agreements are no different.
In many organizations, HR fully expects at least some executives to negotiate.
That doesn’t mean every request will succeed.
It means the initial proposal is often exactly that:
An initial proposal.
Sometimes relatively modest improvements produce significant value.
For example:
- one additional month of salary;
- payment of an annual bonus;
- accelerated commission payments;
- COBRA reimbursement;
- additional RSU vesting;
- a better reference;
- revised non-disparagement language;
- removal of overly restrictive non-solicitation provisions.
Collectively, those improvements may easily exceed six figures for senior executives.
If you want to understand how employees can seek a better severance offer, read my post: How to Maximize Your Severance Offer in California: Tips from a Lawyer
Matt’s Insider Perspective
One of the misconceptions employees have is believing employers become offended when executives negotiate.
Professional employers negotiate every important agreement they enter.
Professional executives do the same.
The issue usually isn’t whether someone negotiates.
It’s how they negotiate.
Respectful, business-oriented negotiations rarely surprise experienced employers.
Mistake #2: Believing HR Is Your Advocate
This topic deserves careful discussion.
Most HR professionals are hardworking people attempting to manage difficult situations with professionalism.
Many genuinely care about employees.
Many conduct terminations with dignity and compassion.
None of that changes one important fact.
HR represents the company.
That’s not criticism.
That’s the role.
During a severance negotiation, HR’s responsibilities generally include:
- implementing company policy;
- administering the separation process;
- obtaining signed agreements;
- communicating approved severance terms;
- reducing organizational risk.
Notice what isn’t on that list.
Maximizing your severance package.
Employees sometimes confuse kindness with advocacy.
Those are not the same thing.
An HR representative can be exceptionally courteous while still advancing the employer’s interests.
The Danger of Oversharing
Immediately after termination, emotions understandably run high.
Many executives begin sending lengthy emails explaining why the termination was unfair.
That’s usually a mistake.
Remember:
Every email.
Every explanation.
Every text message.
Every statement.
May later become evidence if litigation develops.
That doesn’t mean you should refuse to communicate.
It means your communications should be thoughtful, disciplined, and strategic.
Sometimes saying less is actually saying more.
Mistake #3: Threatening a Lawsuit Too Soon
Imagine receiving this email.
“Unless you immediately double my severance, I’ll sue.”
How would most companies respond?
They would likely forward the email to legal counsel.
Positions immediately harden.
Conversations become defensive.
The opportunity for constructive dialogue narrows.
Contrast that with this approach.
“My client appreciates the opportunity to review the proposed separation agreement. After reviewing the circumstances surrounding the termination, we believe there are several issues both parties would benefit from discussing before finalizing the agreement.”
Same basic message.
Completely different tone.
One begins a business conversation.
The other begins litigation.
The goal of severance negotiations isn’t winning an argument.
It’s solving a business problem.
The employer wants certainty.
The employee wants fair compensation and protection of future opportunities.
Those objectives often overlap.
Matt’s Insider Perspective
The strongest negotiators I’ve worked with over the past thirty-one years weren’t the loudest.
They were the most credible.
Credibility creates leverage.
Emotion rarely does.
Mistake #4: Thinking Executive Experience Eliminates the Need for Legal Counsel
Some of my clients negotiate contracts worth tens of millions of dollars.
CEOs.
Chief Financial Officers.
General Counsel.
Technology executives.
Healthcare executives.
Private equity executives.
Sales leaders.
Founders.
Partners.
Many initially believed they could negotiate their own severance because negotiating is simply what they do.
Here’s the difference.
They negotiate on behalf of their companies every day.
They negotiate their own termination perhaps once or twice in an entire career.
Those are entirely different exercises.
Termination is personal.
It affects:
- income;
- reputation;
- retirement planning;
- equity;
- bonuses;
- family finances;
- future employment.
Even exceptionally accomplished executives benefit from having someone at the table who isn’t emotionally invested in the outcome.
One of an attorney’s greatest contributions isn’t simply legal knowledge.
It’s objectivity.
What Experienced Attorneys Actually Do
Many people imagine severance attorneys spend negotiations threatening lawsuits.
That’s usually not what happens.
A good severance attorney often spends more time:
- identifying leverage;
- evaluating risk;
- improving contract language;
- negotiating references;
- protecting equity compensation;
- resolving commission disputes;
- preserving professional relationships.
Sometimes the most successful negotiation is the one where everyone leaves the table believing they were treated fairly.
If commissions are part of your severance issue, read my post: What Is a Compensation Plan in California
Mistake #5: Waiting Until After Signing
Unfortunately, this mistake is often irreversible.
A severance agreement is a contract.
Once signed—and once any statutory revocation period expires—it generally becomes enforceable.
Imagine asking a home inspector to examine the house after you’ve already closed escrow.
Or asking your CPA whether you could have reduced your taxes after filing your return.
Timing matters.
The best time to evaluate a severance agreement is before signing it.
Even if the recommendation ultimately becomes:
“Accept the offer exactly as written.”
At least you’ll know you made an informed decision.
That’s far better than wondering six months later whether you left substantial compensation on the table.
Should You Call an Attorney Before Signing?
Here’s the practical advice I give executives.
A consultation is often worthwhile if any of the following apply.
Your compensation includes:
- commissions;
- RSUs;
- stock options;
- bonuses;
- deferred compensation;
- profit sharing.
Your termination involved:
- alleged poor performance;
- a new CEO;
- private equity ownership;
- restructuring;
- medical leave;
- disability accommodation;
- discrimination concerns;
- retaliation concerns;
- whistleblower activity.
You are:
- an executive;
- physician;
- attorney;
- sales executive;
- technology executive;
- financial executive;
- highly compensated employee.
If several of those boxes are checked…
If your severance package includes RSUs or stock options, read my post: How to Negotiate RSU Acceleration in California Severance Agreements
At least have the conversation before signing.
If you were laid off with unvested RSUs, read my post: RSUs After a Layoff in California: Can I Retain Them?.
Executive Severance Preparation Checklist
Before contacting an employment attorney, gather:
- your severance agreement;
- employment agreement;
- offer letter;
- compensation plan;
- commission plan;
- equity agreements;
- bonus plans;
- recent performance reviews;
- emails relating to your termination;
- employee handbook;
- restrictive covenant agreements;
- stock option documents;
- RSU agreements;
- organizational charts, if relevant.
The more complete the information, the more accurately your negotiating position can be evaluated.
If your termination involved a completed sale and unpaid commissions, read my post: Closed the Deal, Lost the Commission: California Law on Post-Sale Commission Theft
One Final Thought Before the FAQs
I’ve represented employers.
I’ve represented employees.
I’ve sat in countless meetings where management debated whether increasing severance made business sense.
One thing became clear.
Employers rarely increase severance because someone demanded it loudly.
They increase severance because thoughtful negotiation demonstrated that resolution made good business sense.
That distinction explains why some negotiations succeed while others fail.
And it’s one of the reasons experienced legal counsel can often make a meaningful difference.
Considering a California Severance Agreement?
If you’ve recently been offered a severance agreement—particularly if you’re an executive, physician, sales professional, technology employee, or other highly compensated employee—it may be worthwhile to have the agreement reviewed before signing it.
Sometimes the answer will be:
“This is a strong offer.”
Sometimes the answer will be:
“This agreement can almost certainly be improved.”
The important thing is knowing which answer applies while you still have leverage.
Frequently Asked Questions About Negotiating a Severance Package in California
One of the things I’ve learned over three decades of practicing employment law is that executives usually don’t call because they want to file a lawsuit.
They call because they don’t want to make an expensive mistake.
These are the questions I hear most often during severance consultations.
1. Is a severance package negotiable in California?
Often, yes.
Many employees mistakenly assume a severance agreement is a “take it or leave it” offer.
Sometimes it is.
Frequently it isn’t.
Whether negotiation is likely to be successful depends upon factors including:
- why your employment ended;
- your position within the company;
- your compensation structure;
- potential legal issues;
- the employer’s objectives;
- and the amount of uncertainty surrounding the termination.
The first offer is not always the employer’s best offer.
2. Will the company withdraw its severance offer if I ask for more?
In my experience, that is uncommon when the negotiation is handled professionally.
Sophisticated employers expect executives to review agreements carefully before signing them.
A respectful, business-oriented request for additional consideration is very different from issuing threats or ultimatums.
Professionalism matters.
3. Can I negotiate severance after being fired for poor performance?
Sometimes those are among the strongest opportunities.
If:
- performance concerns appeared suddenly;
- you previously received strong evaluations;
- no meaningful coaching occurred;
- or the explanation appears inconsistent with your employment history,
there may be legitimate issues worth discussing.
Every situation is unique, but being terminated for “performance” does not automatically eliminate negotiating leverage.
4. Why are layoffs harder to negotiate?
Because layoffs usually involve predetermined formulas.
Employers strive for consistency.
Consistency reduces complaints.
Consistency reduces discrimination allegations.
Consistency simplifies budgeting.
To negotiate outside the standard formula, there usually needs to be something that legitimately distinguishes your situation, such as:
- executive responsibilities;
- contractual rights;
- commissions;
- equity compensation;
- legal issues;
- transition obligations;
- or other unique circumstances.
5. Can I negotiate my RSUs, stock options, bonus, or commissions?
Absolutely.
Many executives focus only on salary continuation.
That may actually be the least valuable part of the negotiation.
Depending upon your compensation package, negotiations may involve:
- annual bonuses;
- commissions;
- RSUs;
- stock options;
- equity acceleration;
- deferred compensation;
- COBRA contributions;
- consulting arrangements;
- reference language.
Sometimes those issues are worth substantially more than another month of salary.
6. How much can an attorney improve a severance package?
There is no honest answer to that question.
Sometimes the answer is:
“Nothing.”
Sometimes it is:
“A great deal.”
Every negotiation depends on:
- the facts;
- the employer;
- the decision-makers;
- available leverage;
- timing;
- documentation;
- and business considerations.
Anyone promising a specific outcome before reviewing your circumstances is making promises they cannot responsibly keep.
7. What documents should I gather before contacting an attorney?
Helpful documents include:
- severance agreement;
- employment agreement;
- offer letter;
- bonus plan;
- commission plan;
- RSU agreements;
- stock option documents;
- employee handbook;
- performance evaluations;
- termination correspondence;
- relevant emails;
- organizational charts;
- compensation summaries.
Good legal advice begins with good information.
8. What if I’ve already signed?
You should still speak with an attorney.
However…
Understand that signing usually changes the analysis considerably.
Many severance agreements become legally enforceable after execution and expiration of any applicable revocation period.
The best opportunity to negotiate almost always exists before signing.
9. Should I tell HR that I’m hiring an attorney?
Usually, yes—but professionally.
There is nothing improper about obtaining legal advice before signing an agreement that permanently releases valuable legal rights.
Sophisticated employers generally understand that executives and highly compensated employees often seek legal counsel before executing significant contracts.
Again…
Tone matters.
Professionalism matters.
Relationships matter.
10. How do I know if my severance package deserves legal review?
Ask yourself these questions.
- Are you earning more than approximately $150,000 annually?
- Does your compensation include commissions or equity?
- Were you recently promoted?
- Did the employer suddenly claim poor performance?
- Were you on medical leave?
- Did new leadership recently arrive?
- Were you asked to sign a broad release of claims?
- Are you concerned something about the termination simply doesn’t make sense?
If you answered “yes” to several of those questions, a consultation is probably worthwhile.
Final Thoughts: Don’t Negotiate One of the Most Important Contracts of Your Career Without Understanding Your Leverage
For many executives, a severance agreement is one of the largest financial contracts they will ever sign.
It may affect:
- compensation;
- bonuses;
- commissions;
- stock options;
- RSUs;
- retirement planning;
- COBRA;
- future employment;
- professional reputation;
- restrictive covenants;
- and legal rights under California law.
That’s a lot riding on one document.
After representing employers for approximately twenty-five years—and employees for the past several years—I have reached one consistent conclusion.
The executives who obtain the best severance packages are rarely the most aggressive.
They’re the most prepared.
They understand leverage.
They appreciate timing.
They negotiate professionally.
And they make informed decisions before signing.
Sometimes that preparation confirms the employer made a fair offer.
Sometimes it results in a substantially better severance package.
Both outcomes are better than wondering months later whether you accepted less than you could have received.
RLF Blog Post Disclaimer
Updated 06-29-2026
Contact the Ruggles Law Firm at 916-758-8058 to Evaluate Your Potential Lawsuit
Matt Ruggles has a thorough understanding of California employment laws and decades of practical experience litigating employment law claims in California state and federal courts. Using all of his knowledge and experience, Matt and his team can quickly evaluate your potential claim and give you realistic advice on what you can expect if you sue your former employer.
Contact the Ruggles Law Firm at 916-758-8058 for a free, no-obligation evaluation.
Blog posts are not legal advice and are for information purposes only. Contact the Ruggles Law Firm for consideration of your individual circumstances.
