C-Suite shake-ups on the rise, but severance packages are shrinking say arch.law

Employers are increasingly taking a tougher stance on exit packages, according to Andrew Leaitherland, CEO of arch.law which has Collaboration Hubs in London at 8 Bishopsgate and 1 Mayfair Place.

“We’re witnessing a clear trend of businesses reassessing their senior leadership teams, with a sharp increase in C-suite departures,” says Leaitherland - a specialist in executive severance for over 25 years. “While restructuring cycles are common - particularly around year-end and Q1 - this year’s wave of executive exits seems driven by economic uncertainty, rising employer costs, and investor pressure.

Traditionally, severance negotiations included generous ex gratia payments, often reaching 12 months’ salary. Now, Leaitherland notes, “The norm has shifted from nine to six, with some employers pushing for even less. CFOs are scrutinising severance deals harder than ever in an effort to cut costs.”

Beyond financial terms, executives are also facing increased challenges around share options and restrictive covenants. “The ‘bad leaver’ designation is being applied more aggressively, limiting executives’ ability to retain vested options,” Leaitherland explains. “This short-term approach can backfire, as departing executives often become valuable advocates—or vocal detractors—of their former employers.”

Restrictive covenants are another flashpoint. While some believe these clauses are unenforceable, Leaitherland emphasises that, when drafted correctly, they hold legal weight. “Restricting an executive’s ability to poach clients or team members is one thing, but blanket non-compete clauses are far trickier to enforce. Employers need to be strategic, balancing protection with fairness.”

With economic headwinds strengthening, Leaitherland predicts further restructuring and increasingly firm employer stances. “Executives need to be prepared for tougher negotiations, and businesses must ensure they handle these transitions effectively to protect their reputation and workforce stability.”