CBS CEO Les Moonves has resigned amid sexual harassment allegations.
Moonves’ exit will no longer include the severance his original contract allowed.
Terminated employees have rights and options they should understand.
Leslie Moonves, the longtime chief executive officer and chairman of the CBS Corp., quit on Sunday, Sept. 9, just hours after The New Yorker published the second article this year detailing sexual harassment accusations against Moonves. Moonves has denied the accusations.
Since the bombshell reports and accusations, CBS announced Moonves’ severance package is on hiatus until two independent law firms conclude research on the allegations. In the interim, the network plans to donate $20 million of Moonves’ potential financial settlement to organizations that support the #MeToo movement. The New York Times reported he could still walk away with more than $120 million, according to two people familiar with the settlement agreement.
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Prior to Moonves’ resignation, the network executive commanded a nearly $24 million a year salary and boasted a $184 million package consisting of a salary and bonus, company stock and a pension close to $1 million if he leaves the network without cause, reported CBS News.
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Severance Pay and Package Lessons Employees Need to Know
Moonves’ fall from grace marks another in the stream of high-powered executives and celebrities who’ve abused their power to exert force in the workplace. From Moonves’ situation, you can learn relevant lessons on severance even when criminal allegations aren’t involved in an employee exit. The shock and sting of your termination might cloud your judgment, but remember that you have rights and options.
Here are five key takeaways about severance packages:
1. You Don’t Have to Sign Your Severance Package on the Spot If You’re Over Age 40
Exercise your right to at least 21 days to consider the terms — or 45 days if you were a part of a group termination. If you sign, you also have seven days to revoke. In the interim, it’s best to seek out a lawyer who will comb though the details to best position you to collect money and search for a new job.
2. Leverage Your References and Network
Lean into your employer and press for how the company will respond to future reference checks or recommendations. As long as it is warranted based on performance, cement your good standing in your severance agreement. If the company’s in a major upheaval, it’s also a good idea to secure letters of recommendation from supervisors and connect with colleagues on professional networking sites like LinkedIn.
3. Consider Lump Sum vs. Installments for Severance Pay
Depending on your cash situation, consider if a severance lump sum or a series of installments is more beneficial for you and negotiate. Considering it’s income in the eyes of the IRS, there are tax implications for the employee receiving the severage package, and it is subject to Social Security, Medicare and payroll taxes just like your employee paychecks.
4. Know That Severance Isn’t Guaranteed
It’s a harsh reality, but there’s no guarantee you’ll see extra money after being laid off. Depending on the size of your company, you have some rights pertaining to advance warning of a layoff. There’s no rule written in stone when it comes to severance, but the rule of thumb is that executives often receive severance equal to a month’s salary for every year worked, subject to an 18- or 24-month cap). Non-execs can generally expect a week’s salary for every year with the company.
5. Tap Into Other Benefits
The dollar figure is paramount, but don’t lose sight of negotiating other items that have monetary value like health benefits, outplacement services, stock options or equity, tuition forgiveness and keeping company assets such as phones, cars or computers.
Click to find out what you need to know about your paycheck.
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This article originally appeared on GOBankingRates.com: 5 Severance Lessons You Can Learn From CBS CEO’s $184M Exit Deal Loss