Downsizing: How managers avoid the most expensive mistakes when it comes to severance pay
Waiver, bonus, company car: every detail counts in negotiations – managers can easily give away a five- or six-figure sum. A checklist and sample calculations show what matters.
A German insurance company's marketing chief was offered a severance package of €700,000, but this amount is not as substantial as it seems, considering his annual salary of €450,000 and additional company pension contributions of €50,000. If he had stayed with the company until his earliest possible retirement at 65, he would have accumulated around €500,000 in pension claims, which he will now lose.
Labour law expert Christoph Abeln warns that signing a severance agreement without careful consideration can be costly, and that many managers overlook important details, such as negotiating additional benefits like bonuses, company cars, and unused vacation days. In Germany, where many companies are currently downsizing, experts advise employees to carefully review their severance agreements and consider negotiating for more.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
