It is common practice for US-based multinational companies to adopt executive severance plans to provide for additional benefits to be paid to executives in the event of certain specified termination events, including those in connection with the change of control of the parent. These benefits may consist of cash payments, favorable treatment of equity awards, and/or other benefits (e.g., payment of health insurance premiums).
These types of plans help companies recruit and retain talent and also provide some certainty around payments which will be made to executives upon termination while securing a release of claims for the company. Multinationals with executives in countries outside the US often desire to cover their non-US executives under the same plan.
In our latest NASPP guest blog post, we explain why it is difficult to extend US executive severance plans to non-US executives and the approaches companies can consider to provide equivalent severance benefits to their non-US executives.
To read more, click here.