What to Do When You’re Suddenly Asked to Resign From a Senior Role

ByLily James

It can happen surprisingly quickly. You walk into what appears to be a routine meeting and discover that the board, CEO or another senior decision-maker wants you to resign. You may be given a prepared letter, offered a financial package or simply told that the organisation has decided it is time for a change.

The pressure to respond immediately can be enormous, but an unexpected request to resign deserves careful consideration. Senior employment arrangements can involve contracts, incentive payments, notice provisions, directorships, confidentiality obligations and reputation issues. Because executive employment dismissals can become complicated, obtaining independent professional advice before agreeing to anything may be sensible.

Unless there is a genuine reason you must respond immediately, avoid making a major decision simply because the meeting is uncomfortable.

Clarify What Is Actually Being Asked

“It’s time for you to resign” can mean several different things.

Is the organisation requesting that you resign voluntarily? Has a formal decision already been made to terminate your employment? Are they proposing a negotiated departure? Are they asking you to step down from a directorship as well as your employment?

Don’t assume these are all the same thing.

Ask clearly what the organisation is proposing and request the relevant information in writing. Understanding your actual position is essential before deciding how to respond.

Don’t Sign a Resignation Letter on the Spot

You may be handed a resignation letter and told that signing it will make the process easier for everyone.

That doesn’t mean you need to sign immediately.

A resignation is a significant step. Once you’ve formally stated that you’re leaving voluntarily, trying to reverse or challenge that decision may become difficult.

You can remain professional without agreeing on the spot. Explain that you’d like time to review the proposal and obtain appropriate advice.

Taking time to understand an important document isn’t unreasonable.

Find Your Employment Contract

Senior employees often have more complicated contractual arrangements than they remember.

Review your employment contract and any subsequent variations. Relevant provisions might cover:

  • Notice periods
  • Termination rights
  • Bonuses and commissions
  • Share or equity arrangements
  • Long-term incentives
  • Confidentiality
  • Restraint or non-compete provisions
  • Intellectual property
  • Company property
  • Directorships or other appointments

Don’t focus only on salary.

A senior employee’s departure can affect remuneration and benefits that aren’t obvious from the final payslip, particularly where incentives depend on employment status or specific dates.

Understand What Happens to Your Incentives

Bonuses, shares, options and other incentives can represent a significant part of an executive’s overall remuneration.

What happens to them when employment ends may depend on several documents rather than one employment contract.

Check the applicable bonus plan, equity plan or shareholder documentation. Terms such as “good leaver” and “bad leaver” may have important consequences in some arrangements.

The treatment of incentives may also depend on why employment is ending and whether departure occurs before or after a particular vesting or payment date.

Don’t assume that an informal promise about your bonus settles the issue. Ask for proposed financial terms to be clearly documented.

Think About Your Reputation as Well as the Money

For someone in a senior role, the way a departure is communicated can matter enormously.

Consider questions such as:

  • What will employees be told?
  • What will clients or investors be told?
  • Will there be a public announcement?
  • How will reference requests be handled?
  • Can you agree on the wording used to describe your departure?
  • Who will answer questions about why you left?

A carefully negotiated communication plan can sometimes be almost as valuable as the financial terms.

You don’t necessarily want former colleagues, clients and future employers hearing conflicting explanations about what happened.

Keep the Meeting Professional

Being unexpectedly asked to leave a senior position can feel personal, especially after years of commitment to an organisation.

Try not to turn the initial meeting into a confrontation.

Listen carefully. Take notes where appropriate. Ask questions. Request copies of relevant documents and avoid making statements you may later regret.

You can challenge the organisation’s position later if necessary. The first meeting is often more useful as an opportunity to understand what is being proposed.

Don’t Take Company Information With You

Senior employees can have access to highly sensitive information, including financial data, strategic plans, customer records and confidential communications.

Don’t start forwarding files to a personal email account because you’re worried you’ll lose access.

Keep documents you’re lawfully entitled to retain, such as your own employment records where appropriate, but respect confidentiality and information-security obligations.

Taking sensitive company material can create an entirely separate dispute.

Consider the Whole Exit Package

If a negotiated departure is being proposed, look beyond the headline payment.

The complete arrangement might address notice, unused leave, incentives, benefits, company property, confidentiality, restraints, references, public statements and the timing of your departure.

There may also be tax or financial-planning implications worth discussing with suitably qualified advisers.

A larger payment isn’t necessarily better if other terms create unnecessary problems for your next career move.

Give Yourself Time to Think

Senior professionals are accustomed to making decisions quickly. That skill can work against you when the decision concerns your own employment.

You don’t need to prove how decisive you are by signing the first document placed in front of you.

Understand what the organisation is asking, review your contractual position, consider the financial and reputational consequences and obtain appropriate advice where necessary.

An unexpected request to resign can make it feel as though control has already been taken away from you. Responding carefully rather than immediately gives you the best chance of making your next move on informed terms.