[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-280050-105":53,"doc-detail-280050-en":126},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":119,"head_meta":121,"extra_data":123,"updated_unix":125},105,"en","deals-and-departures-tweaking-severance-at-the-moment-of-change","Deals and Departures - Tweaking Severance at the Moment of Change","","Executive CIC severance arrangements in the energy sector are designed to keep executives neutral during transactions, typically through executive severance plans or individual employment agreements. Review of recent upstream M&A shows most companies follow broadly consistent severance structures, yet negotiations often produce minor deviations in termination-year bonus treatment, cash severance definitions/multiples, and long-term equity award vesting. Observations highlight when prorated bonuses or adjusted equity vesting can reduce negotiation friction while preserving shareholder defensibility.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":51,"@type":70,"position":76},"https://docshare.wps.com/template/general/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/deals-and-departures-tweaking-severance-at-the-moment-of-change/280050/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/deals-and-departures-tweaking-severance-at-the-moment-of-change/280050.png","ImageObject",442,249,{"name":88,"@type":89},"Violet","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-09-21","2026-09-16",true,{"@type":98,"interactionType":99,"userInteractionCount":76},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"What is the main purpose of CIC severance protections for executives?","Question",{"text":108,"@type":109},"To keep executives neutral while evaluating and negotiating a potential deal that could cost them employment, aligning outcomes with shareholders’ best interests.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"Which termination-year bonus changes appeared most frequently in the review?",{"text":113,"@type":109},"Eleven companies (46%) made subtle changes to the current-year bonus payout, often moving from target-based treatment toward prorated or greater-of target/actual outcomes, or in some cases to maximum levels.",{"name":115,"@type":106,"acceptedAnswer":116},"How did companies typically handle cash severance and equity awards during negotiations?",{"text":117,"@type":109},"Cash severance multiples were largely unchanged, though two companies adjusted key definitions. For long-term incentives, half of the companies changed performance-based award vesting provisions, including PSU vesting triggers and maximum payout terms.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},280050,1789532459,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":50,"category_name":51,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":76,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":79,"language":135,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":61,"update_tm":125,"read_time":73},4398048950312,"https://ap-avatar.wpscdn.com/avatar/400002538284de19e3c?_k=1778320343897328908","Deals and Departures: Tweaking Severance at the Moment of Change  \nFrom: Jon Szabo, Partner and Ryan McDonough, Senior Consultant  \nEnergy companies, along with the broader public company marketplace, commonly maintain severance protections for executives in the event of termination of employment following a change-in-control, either through an executive severance plan or individual employment agreements. The purpose is to keep executives neutral when evaluating and negotiating a potential deal that might result in the loss of their own employment but is otherwise in the best interest of shareholders. The severance benefits provided under these plans and agreements are quite consistent across energy companies and with the general industry.  \nMeridian reviewed the CIC severance benefits actually provided to Named Executive Officers (“NEOs”) during M&A events that occurred over the most recent E&P industry consolidation period (affecting approximately 24 upstream companies acquired since 2019) and compared them to the disclosed provisions going into the deal negotiation. We observe that many companies applied minor deviations to their cash severance benefits or treatment of outstanding equity awards during the merger negotiation process.  \nCompanies may make adjustments to pre-established provisions for a few reasons:  \n• Incentivize getting the deal done- In certain cases, existing severance provisions may not be enough of an incentive to make executives neutral to losing the opportunity to turn performance around or generate additional value as a stand-alone entity. Enhancements to the programs, particularly to outstanding incentive cycles, may help address those concerns and encourage consolidation.  \n• Address one-off situations-CIC protections and the 280G tax rules that apply to them can be complex with alot of variables that impact individual situations. At the time of an actual deal, companies have more visibility into the impact on each individual’s situation, so adjustments may be prudent to address unique or unintended outcomes.  \nWhile changes made to CIC plans are generally minor, companies typically make adjustments to one of more of the following four areas: Termination-Year Bonus, Cash Severance and/or Outstanding Equity Awards.  \nTreatment of Termination-Year Bonus  \nAmong cash compensation components, the most prevalent changes were applied to the current-year bonus payout treatment. Eleven companies (46% of the sample) made subtle changes to this benefit. The chart below summarizes the frequency of changes made to the termination-year bonus payout. The magnitude of change varies across companies. Two companies decided to pay bonuses at maximum levels in the year of termination while others made more moderate adjustments such as giving credit for actual performance if it exceeded target.  \nChanges to Current Year Bonus Treatment  \n5  \n3  \n2  \n1  \nMade Incremental Adjustments to Increase Payout Value (i.e. , Target to > Target/Actual)  \nSilent Provision Paid Out Prorated Target or > Target/Actual  \nChanged from Target or >Target/Actual to Maximum or Greater  \nWaived Participation Despite Defining Payout Treatment  \n Number of Companies  \n• Made Incremental Adjustments to Increase Payout Value: Indicates that the company made incremental adjustments to their current year bonus payout , such changing the payout term from target to the greater of target or actual.  \n• Silent Provision Paid Out Prorated Target or > Target/Actual: Indicates that the company did not disclose treatment of current year bonuses but ended up providing a payout that was equal to target or the greater of target or actual.  \n• Changed from Target or >Target/Actual to Maximum or Greater: Indicates that the company changed their bonus payout treatment from target to a value equal to maximum or greater.  \n• Waived Participation Despite Defining Payout Treatment: Indicates that the company forewent receiving their current year bonus payout, desp","cbCaicldKmzQJdTE","https://ap.wps.com/l/cbCaicldKmzQJdTE","pdf",223881,"English","# Overview of CIC severance in energy M&A\n## Purpose of executive neutrality during deal evaluation\n## How Meridian reviewed NEO provisions and deviations\n# Why companies adjust pre-established CIC protections\n## Incentivize deal completion\n## Address one-off and tax-related complexity\n# Main areas of adjustment\n## Termination-year bonus treatment\n## Cash severance definitions and multiples\n## Treatment of outstanding equity awards","[{\"question\":\"What is the main purpose of CIC severance protections for executives?\",\"answer\":\"To keep executives neutral while evaluating and negotiating a potential deal that could cost them employment, aligning outcomes with shareholders’ best interests.\"},{\"question\":\"Which termination-year bonus changes appeared most frequently in the review?\",\"answer\":\"Eleven companies (46%) made subtle changes to the current-year bonus payout, often moving from target-based treatment toward prorated or greater-of target/actual outcomes, or in some cases to maximum levels.\"},{\"question\":\"How did companies typically handle cash severance and equity awards during negotiations?\",\"answer\":\"Cash severance multiples were largely unchanged, though two companies adjusted key definitions. For long-term incentives, half of the companies changed performance-based award vesting provisions, including PSU vesting triggers and maximum payout terms.\"}]","Deals and Departures - Tweaking Severance at the Moment of Change | PDF"]