A third of UK employers expect to make redundancies between now and the end of January 2027, according to research from Acas. Among large employers the figure climbs to 46 per cent. If you hold a senior seat, an exit conversation arriving on your calendar this year is no longer a remote prospect.
When it does arrive, most executives fix their attention on one number: the size of the cheque. That is understandable. It is also the part of the deal you are least able to change once the ink is dry, and very often the part that does least to shape your next two years. The terms that decide how quickly you get back to work, and on what footing, sit in the clauses nobody reads twice. Here is what I tell senior clients to study before they sign anything.
The covenants decide where you can work next
Your restrictive covenants are the most consequential lines in the document. Non-compete and non-solicitation clauses can lock you out of the very sector where your network, your reputation, and your earning power all live. A twelve-month non-compete across your industry is not a piece of housekeeping. It is a year of your career signed away in a meeting you did not plan to attend.
A settlement agreement is the moment to dilute, waive, or at the very least clarify those restrictions. Narrow the scope. Shorten the period. Carve out the named competitors that genuinely matter to you. Boards will often trade on covenants, because enforcing them is expensive, slow, and uncertain, and because they would rather you left quietly. That preference is leverage, and it is yours. When the dust settles and you begin to run a proper senior search, you will be glad the door to your own industry was left open.
The reference and the announcement are part of your CV
An agreed reference and an agreed leaving announcement are worth more than most people realise, and they cost the employer nothing. Get the wording of both written into the agreement. You want a reference that a headhunter can read without raising an eyebrow, and an internal and external message that frames your departure as a decision rather than a casualty. In a crowded senior market, the story attached to your exit travels ahead of you. Control it on the way out, because you will not get a second go at it once it is public.
This is also the moment to make sure your own materials match that narrative. A refreshed executive CV and a LinkedIn profile that tells the same confident story will do far more for you than a slightly larger lump sum.
The tax line that quietly costs you
The structure of the payment matters as much as the headline figure. In the UK, the first £30,000 paid for loss of employment is generally tax-free, while payment in lieu of notice is taxed as ordinary earnings and carries National Insurance on top. Two offers of identical gross value can leave very different sums in your account depending on how each element is labelled. Push for as much as possible to be categorised as compensation for loss of office, and take proper advice on bonuses, share options, and any long-term incentive plan, all of which are negotiable and all of which are easy to leave behind by accident.
Outplacement is a term, so ask for it
Career-transition support can be written into a settlement, and at senior level it should be. The better employers offer it without prompting. The slower ones, and there are still plenty of those, will let you walk out with a cheque and a cardboard box and call it generosity. Ask for funded outplacement and redundancy support, executive coaching, and help with a structured career transition. It is cheaper for them to grant than to argue over, and it is worth real money to you.
Do not negotiate alone, and do not negotiate angry
The first offer is rarely the final one, and the employer almost always pays a contribution towards your legal advice, so take it. Before you respond, decide where you want to be in six to twelve months. If your priority is a swift return to an executive seat, a drawn-out dispute may cost you more in momentum than it wins you in cash. If you are weighing a portfolio life or a deliberate pause, you can afford to hold out. Knowing your own destination first is what turns a settlement conversation from a scramble into a plan. A standing career advisory relationship is one way to have that thinking done before the meeting, rather than during it.
FAQ
Can I negotiate a redundancy settlement, or is the offer final?
You can almost always negotiate. According to Acas, the opening figure is a starting position, not a verdict. A measured, well-advised counter is expected, and at senior level it is the norm.
How much of an executive settlement is tax-free?
In the UK, the first £30,000 of a genuine termination payment is usually free of tax. Notice pay, holiday pay, and contractual bonuses are taxed as normal earnings, so how each element is labelled makes a material difference to what you keep.
Should I accept restrictive covenants to secure a larger payment?
Be cautious. A wide non-compete can keep you out of your own market for a year, which may cost you far more than the extra sum on offer. Try to narrow the scope or shorten the term before you trade it for cash.
Can outplacement support be included in the agreement?
Yes. Funded outplacement, coaching, and CV or LinkedIn support are commonly written into senior settlements. They are inexpensive for the employer to grant and genuinely valuable to you, so they are worth asking for explicitly.
An exit you did not choose is still a transition you can shape. The cheque is finite and spent within a year or two. The covenants, the reference, the narrative, and the support you secure on the way out are what decide how the next chapter opens. Read the clauses with the same attention you would give a contract you were signing on the way in, because in every way that counts, that is exactly what it is.
