Ask HN: Why do executives get high severance packages? - rohanmahajan
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jsoc815
Two reasons come to mind:

1) Contract negotiations;

2) It's said because they are the face of the organization (and hence,
whipping boy/girl) that their jobs are less secure than those of a rank-and-
file employee. So, to incentivize someone to take/keep the job and cope w/the
increased risks, they must be paid more.

*There also an age old story about a compensation study that was done by, IIRC, McKinsey that is said to be responsible for the compensation inflation that has appeared over that last few decades or so. If you search around on the web, you can probably nail down references to or specifics of it.

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Chyzwar
Because in many cases these severance packages are combined with a non compete
clause.

Executives often have direct access to clients. There is a real risk of
executive leaving with your best clients/employees. High severance packages
are usually a form of insurance.

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vfulco2
Because they are paid for their warrior spirit, slash and burn until
everything is leaner than lean and stock price is 20% higher. If org blows up,
they still walk away with FU money, the new American dream.

