ECFA Guidance: a Year's Severance Pay is "Highly Unusual"

I reported yesterday that the terms of Mark Driscoll’s arrangement with the church upon termination that I have seen involve the provision of base salary and benefits for a year. If indeed these are the arrangements in force, then the Evangelical Council on Financial Accountability may have yet another reason to review Mars Hill Church’s practices. According to an article on church employees and severance pay on the ECFA website, a year’s severance is “highly unusual.”

How Much Severance Pay Should be Paid?
No bright line rule exists for determining what how much severance pay to provide. The main concern should always be proper stewardship of the church’s financial assets in furtherance of the church’s religious purposes. If a long-term employee is leaving the church, it may be a very appropriate quid pro quo payment to provide generous severance. If a contentious pastor leaves, the church leaders may feel forced to provide extensive severance as a risk management decision. Generally, provision of a few weeks to a few months of severance pay should deemed reasonable under many circumstances. In contrast, a year’s worth of severance pay would be viewed as highly unusual and therefore would warrant extensive due diligence and substantiation to justify such a large severance package.

I realize that “no bright line rule exists” but since the ECFA guidance is there, I suspect it will be of interest to Mars Hill stakeholders.