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Executive Severance Arrangements: How and Why They are Changing

Severance practices continue to evolve, but not as dramatically as we have seen in previous years. Corporate directors persist in implementing reformations of severance practices, but at this point these changes tend to involve minor tweaks rather than drastic revisions. These reformations take place in a variety of ways: the cash severance amounts are becoming smaller, less equity is being accelerated, and the excise tax gross-up provision is being phased out.