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Salary Update: Severance typically four to nine months of base pay, but not guaranteed

Oct. 17, 2014
By Mark Graham

The latest tax documents show that when severance is paid, it typically equals four to nine months of base pay, but severance is not guaranteed for departing CEOs. 

The reported severance payment from Council of Better Business Bureaus to former CEO Stephen Cox was right in the middle of that range. His $150,000 severance payment in 2012 was approximately six months of his base salary. 

The value of accrued leave can boost the final paycheck of departing CEOs. The American Association for Marriage and Family Therapy paid departing chief J. Michael Bowers $28,789 in accrued leave in 2012 on top of $173,265 in severance. Combined, Bowers’ package was equal to about 10 months of his base pay.