The top ranks of U.S. companies are always in flux‚ but that’s been more true than usual recently. During the first few months of this year, CEO turnover was 18% higher compared to 2022, according to a report from coaching firm Challenger, Gray & Christmas.
But it’s not only CEOs that are coming and going at a rapid pace: A few C-suite roles—CFOs, chief data officers, and CMOs—have all recently vied for the dishonor of having the shortest average tenure among C-suite jobs. And CFO turnover at Fortune 500 companies has spiked 500%, according to data shared with Fortune
Given the increased shuffling, Fortune asked some top employment lawyers and leadership coaches for advice about securing the best possible senior leader pay package, including great severance. Here’s what they shared with us.
1. Find a good lawyer
Compensation packages can be complex, involving base bay, severance rules, signing bonuses, relocation benefits, performance payouts, and many other possible components. Most people hire an employment lawyer to get through the negotiations, often finding one through word of mouth, says Patrick Boyd, a lawyer and founder of the Boyd Law Group in New York. Choose someone with plenty of experience with C-suite compensation and a positive track record, he suggests. It’s also useful to ask whether a lawyer has published recently and is quoted in the press, signs they’re excited about what they do, he adds, saying those attorneys are more likely to pay attention to details and relevant new legislation.
2. Do your research
Whether you’re a C-suite executive being recruited by a new company or moving into your first big role, the details of your pay package, including your severance, will be dictated by market rates. While your lawyer should have plenty of data to inform your quest, do your own research, too, says Wendi Lazar, a partner at law firm Outten & Golden and co-head of the firm’s executives and professionals practice group. (For public company research, for example, see EDGAR, the SEC’s online repository of corporate filings, she adds.) Be ambitious but also realistic, the lawyer suggests. If you’re up for a CFO role, know that you’re not going to make more than the CEO—but you can still make quite a lot.
3. Let the company speak first and deflect questions about your current salary or benefits package
Once you feel informed, decide what range of pay is acceptable to you, but let the company float the first number to avoid accidentally selling yourself short.
It’s now illegal in many states for recruiters to ask about your current salary and to use that as a starting point for your deal. But it happens, says Lazar. To gracefully decline to answer, she says, you might say something like, “I don’t want to negotiate against myself, and I’d prefer to receive a hard offer from you that we can work from.”
4. Bias is real
If you’re a woman, and particularly a woman of color, assume that unconscious bias is playing a role in your salary package conversation, experts told Fortune. Be sure to advocate for yourself and make sure your lawyer or coach is tuned into the possibility that you’re not earning as much as other people, particularly white men, at the same level.
Though a hesitation to push for a plush package doesn’t always fall along gender lines, Lazar says, she has found even women at high corporate levels, especially women who are in their 50s or older, are more reluctant to ask for more pay or more comprehensive perks, such as relocation, loan forgiveness, or insurance benefits.
5. Don’t count equity as cash
You may know on an intellectual level that equity is not cash, but many executives still make the mistake of mentally overvaluing the equity portion of their salaries, says Boyd. That may make you more likely to accept a subpar base salary, believing that your stock options will be compensation enough. “Your equity is worth $3 million the same way a Powerball ticket is worth $1.6 billion,” he says. In private and public companies, equity is volatile and can be worth far less than predicted by the time it vests, depending on market conditions, potential ownership changes, and, in the case of private firms, the whims of the founder.
C-suite candidates can, however, negotiate an accelerated timeline for a stock options vesting schedule and make sure the options will still vest even after a departure if they are let go without cause.
6. Allow your lawyer to ask awkward questions about severance.
Most people go into a new situation filled with optimism. Planning for what will happen if the job doesn’t work out is counterintuitive and unpleasant, says Lazar.
When entering the C-suite for the first time, she adds, some clients find it awkward to even raise the possibility of a separation. “They are thinking about how wonderful it is, and the opportunity,” says Lazar. “They probably will be going in front of a comp committee, and a board, and meeting the players, and the last thing that they want to do is start saying, ‘But what happens if you fire me?’”
Therefore, she has an agreement with her clients—leave the “what ifs” to her. “They’re thinking about the marriage and I’m thinking about the risk of divorce,” she says.
As a rule of thumb, severance pay will cover six to 18 months of your salary, and it may also include a vesting schedule for shares. If your previous job had a generous severance package, or complex deferral plans, your lawyer will make sure that your new package matches those benefits or exceeds them.
Although it’s still uncommon, more companies are including poor performance as a reason for severance to be withheld, Lazar warns, and that’s something that ought to be bargained out of a contract.
7. Discrimination in corporate America is another reason not to ignore your severance package
Women who leave top roles are also often viewed differently than men in the same position. “Men can leave a job where they’ve been terminated and they failed maybe once, maybe twice, and somehow they get that next CEO position,” Lazar observes. But, whether as CEOs, CFOs, or in other leadership positions, women have a much harder time getting reemployed if they’ve been let go. That’s why severance packages ought to be optimized for women executives in particular. “I want to make sure they’re being made whole,” says Lazar, “and they’re more protected because they are more vulnerable in the marketplace.”
8. Play offers against each other, but be clear-eyed about the role that will make you happiest
Most successful senior executives are getting calls from several companies at once, says Boyd, and it pays to get the best possible offer from each place and then play companies off of one another to finesse a superior deal.
Once that process is over, however, the job candidate should evaluate all of the interested companies for the best overall fit. Is the company’s culture right for you? Is the stage of development what you’re looking for? Will you grow in the position and be poised for whatever comes next in your career? “It’s going to be an 80-hour workweek, it’s going to be driving their lives, and it’s going to be challenging, and so it’d better be something that [they] believe in,” says Boyd. “Being grounded and thoughtful about that is an important personal strategy.”
9. Consider the state of the company and where you are in your career
Your pay and severance requirements should also reflect your expectations for your stint. For example, walking into a company as a turnaround CEO means you’re walking into an inherently risky situation, says Boyd, and you may want to emphasize guaranteed severance (cash) over equity.
Similarly, your severance benefits should be aligned with where you are in your life, says Lazar. If you’re close to retirement, a long noncompete requirement may not be a problem, but if you’re still building your career, you might not want to sideline yourself for very long. “This isn’t just about getting paid while you’re not working,” she emphasizes. “This is about not being in the marketplace.”
10. Bear in mind that the compensation pieces need to fit together
Your lawyer should handle your entire pay package and look for any irregularities between the pieces. “If someone is taking on a new job, and it has a two-year non-compete [clause], and they’re getting six months of severance, that’s a problem,” says Lazar.
11. Include a clause that allows you to quit for “good reason” and still receive severance
It’s not uncommon for C-suite executives to get into a job and find it turns into something else entirely. A CEO will make changes that dramatically reshape someone’s role, for example, making it less satisfying. You might find yourself with a new manager, or one of your basic responsibilities is given to someone else. “You feel diminished,” says Lazar.
Because of such risks, or the possibility that you’re being demoted out of a job rather than explicitly asked to leave, your contract should include a provision for you to exit with “good reason,” she explains. That trigger allows a senior executive to exit and keep their severance, rather than sue the company for a breach of contract. It’s also standard for executives to receive twice the usual severance when their departure is connected to a change of corporate ownership.
12. During an exit, ask for perks that aren’t in your contract
Severance may be prearranged in C-suite contracts, but there may still be room to ask for extra benefits at the time of departure, says Ana Perea, who runs her own consulting company and is a principal at the Boswell Group. Perea has worked with clients who requested topped-up healthcare coverage, for example, or an extra generous payout when they were let go, because they were near retirement age and potentially facing a tough search for a new job.
Some companies will offer to cover the costs of working with an executive search firm to find your next gig, a benefit she champions. “That is a more generous employer,” says Perea, “and might be somebody who, frankly, doesn’t feel so great about how they let the person go.”
At the same time, says Perea, expect the discussion to be emotional no matter how great the company’s intentions. “It’s always hard,” she says. “It’s a separation.”