advertisement
advertisement

It’s just not working out: severance advice for startups

It’s just not working out: severance advice for startups
[Image: Weenee/iStock]

Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at dearfounder@fastcompany.com.

advertisement

Q. What is the appropriate severance for an employee who has been here since the beginning but just isn’t working out? I offered her three months’ pay and she responded by saying, “That’s horrible!” What is a fair comp package? What am I supposed to do?

–Founder of a successful startup

Dear Founder,

I think three months’ severance is fair, and you can let her buy whatever stock has vested if she chooses to do so.

You always want to be gracious to people who leave, but you have a greater obligation to the people who are still there and your investors. You can’t invest in making one person much happier and risk taking care of the rest of the employees and the company.

Startups don’t have the resources that big companies do. Also, you have to be very careful with what you do here because it may establish a precedent and set a standard. You may be experiencing this already, and it may even be part of what the issue is.

I know this is hard. But it will be over soon. You need to put all of your energy and focus on building your company. No matter the package, be sure to treat the departing employee with dignity and respect on the way out.

advertisement
advertisement