Severance Package

A severance package is compensation and benefits offered to a departing employee in exchange for a signed release of legal claims against the company. The departure can come through layoff, termination, or negotiated exit. Typical terms are 1-4 weeks of base pay per year of service, extended health insurance (COBRA subsidy), and accelerated vesting on equity. It's the company's standard tool for ending employment relationships cleanly.

The standard severance package components:

Base severance: typically 1-4 weeks of base salary per year of service. Common patterns:

• 2 weeks per year of service: most common at venture-backed companies.
• 4 weeks minimum + 2 weeks per year: more generous; sets a floor.
• 3 months minimum for sen...