Unable to retain high-cost CXOs, companies look at 'mutual separation'
Companies across sectors are increasingly finalising “mutual separation” agreements for top C-suite executives who were hired on lucrative packages but are no longer considered essential to new growth strategies. Exits are being planned with lead times of 12-18 months at large companies. Startups, too, are offering a mutually acceptable exit runway to ease out CXOs and CXO-1 talent.
While exit deals are struck at the topmost level in utmost secrecy, outgoing executives are given a negotiated package with all benefits but without key responsibilities, said industry insiders. These executives are reassigned from key projects and released at a short notice when the executive is up for an assignment.
“In the past 6-8 months, we have seen a 4X jump in the number of senior candidates who can join at a very short notice period of 2-4 weeks. Many of them are from IT services or startup sectors, while there are many from the traditional sector companies,” said Anshuman Das, CEO, Longhouse Consulting.
He attributes the current scenario to multiple reasons such as availability of internal candidates at much lower cost, role redundancy of one-time “heavy-hitters”, and new slower growth strategies.
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