severance package

A severance package refers to the money and other benefits an employee receives when their employment ends. This can include severance pay, which is typically based on an employee's length of service. A severance contract is an agreement that outlines these benefits at the time of separation.123

A specific type of severance package is a "golden parachute." This is a lucrative provision in an executive's employment contract that provides substantial benefits if control of the company changes, such as through a merger. Golden parachutes are usually reserved for a select few senior executives and are negotiated individually, unlike standard severance pay which is based on years of service. These packages can include cash, stock options, pensions, and other perks.4