How can I negotiate an exit or severance package?

This week, I received a call from a C-suite client who had just been laid off.

With a substantial severance package on the line (mid-six figures), he needed to approach one final conversation with his CEO in a way that would protect both his reputation and his financial stability.

Drawing on over 20 years of experience guiding executives through high-stakes transitions, I offered him some counterintuitive advice that can significantly boost outcomes in these situations.

Here’s what I shared with him, and what you can use to approach your own negotiation if you’re ever in this position.

1. Don’t Fight the Layoff - Embrace It

It might sound counterproductive, but when negotiating your exit, the last thing you want to do is challenge the decision. Instead, tell your CEO that you understand the rationale behind it. Even if you strongly disagree with the direction, presenting yourself as someone who sees and respects the broader strategy will relieve any tension they might feel about the decision.

This isn’t about surrendering leverage; it’s about making them feel comfortable. Executives facing layoff negotiations are often tense, and putting them at ease can make them more willing to help you. By showing empathy toward the company’s goals, you set the stage for a smoother negotiation.

2. Avoid Legal Battles (Unless Absolutely Necessary)

Understandably, the idea of building a legal case can feel tempting, especially if the layoff feels unfair. But unless your situation clearly falls into illegal territory, legal battles tend to be costly, time-consuming, and emotionally exhausting. Additionally, many CEOs and CFOs relish the chance to fight a legal battle -especially one they’re confident they’ll win. It’s not worth giving them that satisfaction or tying yourself to a drawn-out fight that could burn your energy and tarnish your professional reputation.

Instead, focus on the immediate, negotiable factors that can ease your transition, protect your reputation, and keep your potential reference intact.

3. Appeal to the Leader’s Highest Self and Values

It may feel strange to compliment the same leader who just let you go, but acknowledging their leadership and expressing gratitude for the experience can go a long way. Tell them you’ve valued the opportunity to work together, highlight some key moments of collaboration, and share your hopes for the company’s future.

Then, turn the conversation to your own next chapter: explain that you want to create a stable future for yourself and your family and that a smooth transition is critical for you to find the right opportunity. Expressing your personal connection to your role and responsibilities reinforces that you’re not asking for charity but rather for a justifiable path to a new chapter.

4. Emphasize Your Value - Firmly and Tactfully

Before the call, prepare five key points that demonstrate the impact you’ve made. Think specifically about how you’ve contributed to the company’s revenue, product development, processes, or team performance. Ask for a brief moment to share these highlights “not to contest the layoff, but to show how far the function has come” under your leadership. Framing this as advocacy for your team’s progress rather than a self-centered pitch will make it easier for the CEO to hear - and remember - your contributions.

5. Rebrand Yourself on the Way Out as an Agent of Positive Change

When sharing your achievements, emphasize your role as a change-maker who’s helped to elevate the company and its people. This approach doesn’t just remind the CEO of your contributions; it subtly rebrands you on the way out as someone who’s led with integrity and impact. It’s an important step, not only for the negotiation but for protecting your professional brand as you move on to the next opportunity. Plus, standing up for your team reinforces your reputation as a leader who’s committed to their success, even in challenging times.

6. Ask Clearly and Directly for What You Want

When it comes to the final ask, be concise, clear, and direct. A confident approach signals that you’ve thought this through and know exactly what you need. Your earlier points about value and shared respect create a more comfortable context, and this straightforward approach increases the likelihood that they’ll offer what you’re asking.

Results & Key Takeaway: Focus on Their Values, and Your Value

After his call, my client received more than he’d hoped for. The CEO offered a positive reference, made a connection to an influential investor, and extended a substantial severance package. By focusing on the CEO’s values and his own value, he transformed an uncertain situation into one that respected his work and helped stabilize his career transition.

If you’re ever facing a similar conversation, remember that the most effective approach isn’t to fight. Instead, make the conversation about shared values, recognize the role you’ve played, and ask clearly for the support you need to move forward. When you approach it this way, you’re more likely to receive a fair and supportive exit.