Compare Separation Agreement Against Compensation Survey

Skill: Gap Analysis — Separation Agreement vs. Compensation Survey Benchmarks

1. Subject-matter triage

• Treat this as a comparison-and-gap-analysis task, not a drafting task.
• Identify the governing source set up front: draft separation agreement, employment agreement, equity plan, benchmark materials, and client instructions.
• Separate what is proposed from what is already contractually owed, what is market-supported, and what is merely negotiated upside.
• If the source set contains multiple termination paths, benefit windows, award classes, or benchmark populations, enumerate them before analysis and run the comparison separately for each.

2. Failure modes the skill is correcting

• Analyst compares the aggregate separation package without decomposing it into its constituent components and checking each component against the relevant benchmark distribution separately.
• Analyst characterizes a package as above or below market without identifying the benchmark percentile or comparable positioning of each proposed component.
• Analyst assesses cash severance and equity treatment in isolation without calculating the aggregate economic value of all components together and comparing it against any applicable package cap or internal constraint.
• Analyst fails to cross-check the employment agreement's contractual entitlements against the separation package to identify whether any proposed term falls short of what the executive is already owed.
• Analyst describes a gap without stating how large it is, which governing document controls it, or why it matters to the client.
• Analyst buries the negotiation takeaway instead of separating core protections from adjustable extras.

3. Legal frameworks / domain conventions that apply

• Compensation survey benchmarking: executive compensation surveys commonly report severance, bonus, equity, and benefits data by percentile or comparable distribution point; each component should be positioned against the relevant benchmark point, not described generically as market, above market, or below market.
• Cash severance benchmarking: cash severance is commonly expressed as a multiple of base salary and may include a bonus component; where the benchmark distinguishes target bonus from actual performance, the analysis should keep those measures separate.
• Equity treatment under separation: benchmarks may vary by termination reason, change-in-control context, and award type; analyze vesting, acceleration, forfeiture, and post-termination exercise or settlement treatment as distinct issues.
• Benefits continuation benchmarking: continuation periods for health and welfare benefits are a separate benchmarked component and may warrant translation into dollar value when the overall package is assessed.
• Employment agreement controls: the separation package should be checked against contractual severance, bonus, equity, change-in-control, reimbursement, release, or notice rights already embedded in the employment agreement.
• Equity plan controls: the equity plan governs award treatment on termination and may require plan-compliant amendment mechanics, board action, withholding, or tax-sensitive structuring.
• Governing-document hierarchy: where a draft separation agreement conflicts with existing contractual entitlements, the analysis should identify whether the draft preserves, supersedes, or narrows the baseline right and whether that is permissible under the source documents.
• Market framing: benchmark analysis should distinguish between floor, target, and stretch positioning so the reader can see which components are protectionary and which are negotiable.

4. Analytical scaffolds

• Component-by-component benchmarking: for each material component, state the proposed term, the benchmark reference point, the component’s market position, and the resulting gap.
• Contractual entitlement check: compare each proposed term against the employment agreement and identify any shortfall, omission, or inconsistent condition.
• Plan-consistency check: compare any equity or award treatment against the equity plan and note whether the draft follows the plan, requires amendment, or creates a potential inconsistency.
• Aggregate value review: assess the total economic package as a whole and test it against any governing cap, constraint, or internal approval threshold disclosed in the source set.
• Scenario separation: if the package differs by termination without cause, for cause, good reason, change in control, or similar trigger, analyze each scenario separately rather than blending them.
• Negotiating leverage assessment: distinguish core entitlements from negotiated enhancements, and identify which items are most likely to move without undermining the executive’s baseline protections.

5. Vertical / structural / temporal relationships

• Map the relationship among the draft separation agreement, the employment agreement, the equity plan, and the benchmark materials before drawing conclusions.
• Track vertical hierarchy: baseline contractual rights first, then plan-level restrictions, then draft-only enhancements, then market comparison.
• Track temporal sequencing: notice, release effectiveness, termination date, payout timing, equity lapse or acceleration date, and benefit continuation period may each carry different consequences.
• If a term is conditioned on a release, resignation timing, or continued service through a milestone, state how that condition changes the economic or legal effect of the term.
• If one provision modifies another across documents, identify the operative document and the consequence of the overlap.

6. Output structure conventions

• Format the work as a gap analysis memorandum addressed to the general counsel or deal team.
• Open with a short executive summary that states the overall position, the main gaps, and the principal leverage points.
• Include a table that compares each major component with: proposed term, benchmark reference point, benchmark position, contractual baseline, gap assessment, and client impact.
• Use a uniform severity scale for each issue and define the scale once near the top.
• For each issue, close the discussion with: the size or scale of the gap, the controlling source document or authority, and the consequence for the client.
• Include a separate section for contractual entitlement comparison and another for equity-plan consistency.
• Include an aggregate economic value section that states the package’s total economics and any relevant cap or constraint.
• End with a Recommended Actions section that gives imperative next steps, assigns each to a role, and ties each to the next milestone or deadline available from the source set.
• Keep the memo concise but complete; prioritize direct comparison language over narrative discussion.