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PLAYBOOK TEMPLATES

Severance & Employment Separation Agreement

A Severance & Employment Separation Agreement formalizes the terms of an employee‚ exit and related payments. This playbook emphasizes release language, confidentiality, and non-disparagement clauses.

Compensation Structure

Why This Matters: Transparent and well-defined compensation terms minimize disputes over pay, deductions, and benefit entitlements.

Negotiation strategy

If you're the Company:

Ensure the compensation structure aligns with company forecasts and budget constraints. Clearly define payment schedules and performance metrics to avoid future disputes.

If you're the Employee:

Negotiate for clear and achievable performance-based incentives. Ensure that payment schedules and base salary meet industry standards and personal expectations.

Essential elements

1

Base Salary

Annual salary paid monthly.
2

Performance Bonus

Incentives based on performance.
3

Payment Schedule

Timely and regular payments.

Action framework

ACCEPT

Propose edits if payment terms are ambiguous or misaligned with industry standards.

EDIT

Reject if the clause lacks clear compensation terms or violates labor laws.

ADD

Add language to specify performance metrics and payment schedules if absent.

PRO TIP

Always ensure performance metrics are specific, measurable, and aligned with strategic goals.

Example clauses

FAVORABLE

Preferred Compensation Clause

"The Employee shall receive a base salary of $X per annum, payable in equal monthly installments. In addition, the Employee is eligible for a performance-based bonus of up to Y% of the base salary, contingent upon meeting specified performance targets."
NEUTRAL

Fallback Compensation Clause

"The Contractor shall be compensated at a rate of $X per hour, with payments made bi-weekly. Performance bonuses may be awarded at the discretion of the Company based on project outcomes."
UNFAVORABLE

Unclear Compensation Terms

"The Employee's compensation will be determined at the end of the fiscal year, with no specific payment schedule or performance criteria outlined."

Fallbacks

High-Risk Projects

In high-risk projects, ensure compensation includes risk premiums and clear criteria for performance bonuses to motivate and retain talent.

Start-Up Environment

In start-ups, compensation may include equity options. Ensure these are clearly defined and align with company growth projections.

Remote Work Arrangements

For remote work, ensure compensation accounts for home office expenses and includes clear communication on performance expectations.
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