Why Now May Be the Time to Revisit Executive Severance

As CEO departures and reputational lapses make headlines, boards may need to reassess severance packages, sometimes known as “golden parachutes.”

Nestle ousted its CEO, Laurent Freixe, in early September for breaching the company’s code of conduct by hiding a relationship with an employee. On its own, this type of story is not novel. What seems unique is that Freixe did not receive an exit package, or what the media and consumers might call a “golden parachute.”

The term “golden parachute” has evolved beyond its traditional association with mergers or takeovers to denote ...