SiliconBeat

If you have an employee who may be contemplating leaving, is promising him more in severance should that happen the most effective way to deal with the situation? That appears to be what happened last week when eHealth, the Mountain View online life insurance provider, reached a “retention” agreement with its chief executive, Gary Lauer.

When he was first hired in 1999, Lauer’s termination benefits called for him to receive 12 months worth of salary and health care benefits if he were terminated “without cause” or quit “for good reason”.

The new deal doubles the salary-based benefit to 24 months worth of pay along with his target bonus for the year, pro-rated through his termination date, all to be paid in a lump sum. Based on his 2008 salary, that would be at least $770,000 plus some part of his $250,250 target bonus.

The company also increased his health care benefit, agreeing to pay for 18 months of it, six months more than called for by the original agreement.

The company also agreed to assume responsibility for leases on his home and automobile in the San Francisco Bay Area, which Lauer would get to use for two weeks after his termination, or until the end of the month in which he was terminated, which ever is later.

This was probably meant to make up for the elimination of a benefit included in the original agreement that called for Lauer to also be paid in cash for a year’s worth of non-health benefits the company provides him. Last year, that included $64,751 for housing, $7,810 for a car, $42,324 in airfare and $96,923 for payment of taxes associated with these items.

So now Lauer will not only get more cash should his employment terminate, he’ll be less encumbered by the process of coping with those  mundane details like canceling home or auto contracts that confront the rest of us should we be faced with the same fate.