Expert Insights into Severance Packages for High-Income Earners in Ontario


Navigating the complexities of severance packages is particularly crucial for high-income earners. The financial and professional stakes are high, and understanding the nuances of severance agreements in Ontario can significantly impact your career transition and financial well-being.

Understanding Severance Packages:

A severance package is compensation provided to employees upon termination. For high-income earners, these packages are not just about the money; they often include benefits, stock options, and clauses about non-solicitation and confidentiality.

Components of a Severance Package:

  • Monetary Compensation: Often based on length of service, age, position, level of compensation, and availability of comparable employment.
  • Benefits Continuation: Coverage for medical, dental, and other insurance.
  • Stock Options, Bonuses, Commissions and Equity: Considerations on the handling of incentive compensation.
  • Non-solicit and Non-disclosure Agreements: Restrictions on future employment and information disclosure.

Legal Framework in Ontario:

In Ontario, the Employment Standards Act (ESA) provides the minimum standards for
severance, but often, executive contracts exceed these minimums. It’s crucial to understand not
just the ESA but also how your specific contract and common law apply to your situation.

Key Legal Considerations:

  • Entitlement Under ESA: Typically requires an employer to provide notice and severance.
  • Common Law Entitlements: Often far exceed statutory minimums and are based on factors like age, length of employment, job title, and availability of similar employment.

Factors Influencing Severance for High-Income Earners:

For those in high-earning positions, severance is not straightforward and is heavily influenced by:

  • Contractual Terms: Specific clauses in employment contracts can drastically alter standard practices.
  • Executive Level: Higher positions often negotiate severance as part of initial employment agreements.
  • Economic Climate: Broader economic conditions can influence the negotiation leverage of both parties.

Negotiating Severance Packages:

  • Preparation: Understand the full scope of your current benefits, role, and market conditions.
  • Professional Representation: Engage with a legal expert in employment law to navigate complex negotiations.
  • Objective Setting: Know what is most important to you, whether it’s financial compensation, benefits continuation, or other elements.

Case Studies:

At Workplace Sage Legal, we have been successful at obtaining more value in lieu of incentive compensation, longer notice periods, and increased rights with respect to stock options, RSUs, DSUs, PSUs, etc.


For high-income earners, severance packages are more than just a paycheck at the end of a job—they are a crucial component of career strategy and financial security. Understanding the legal landscape and having expert negotiation skills can make a significant difference in the outcomes of these agreements.


When facing termination, high-income earners should promptly consult with an employment lawyer to review their contracts and prepare for negotiations. The right legal advice can transform a standard severance package into one that truly reflects the value and contributions of an executive’s tenure. Workplace Sage Legal is committed to guiding clients through these complex negotiations with expertise, empathy, and strategic insight.

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