Severance Multiple

A severance multiple expresses an executive’s severance entitlement as a multiple of a defined pay base — commonly base salary alone, or the sum of base salary and target bonus — rather than as a flat dollar amount. A "2x salary and target bonus" severance formula means the payment is calculated fresh each year against whatever those two figures happen to be at the time of departure.

Multiples are typically higher for change-in-control terminations than for an ordinary termination without cause, and higher still for the chief executive than for other named executive officers — a 3x change-in-control multiple alongside a 1x ordinary-termination multiple for the same executive is a common shape.

Because the multiple applies to a moving base, the same stated multiple produces a larger severance payment for an executive whose salary and target bonus have grown since the agreement was last negotiated, without the agreement itself needing to change.

Wintrust's disclosed severance formula is 3x salary and target bonus — the multiplier and the base the agreement is written against, not a flat dollar figure.