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Triton survey: Severance pay is handled a variety of ways

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The idea for this month’s survey comes from a veteran captain with 10 years with his current boss. Like many in yachting, the vessel is for sale and he wonders if he’ll get the severance pay promised him in the yacht’s policy manual.


He wrote it, with what he believed to be a yacht industry standard in mind: one month’s severance pay for each year of service.

But in this economy, where the boss has stopped pay raises and no longer grants severance pay to his shore-based employees, he’s wondering if there is a yachting standard for severance pay anymore. Or is it like most other things in yachting: they survive through a law of their own.


Read respondents comments here.


This captain’s severance pay is outlined in the yacht’s policy manual, so we start there. Does the yacht have a policy manual that includes terms of employment (time off, bonuses, etc.)?


We thought this was pretty standard, but the answers were closer than we thought they would be. More crew operate under a policy manual then don’t, but not by much. About 56.5 percent of our respondents have a policy manual; 43.5 percent do not.


It’s worth noting that more than a handful of respondents pointed out that their payment agreements, including things like bonuses and severance pay, were verbal and did not appear in any written policy manual. So the “no” answers here don’t necessarily mean there is not severance pay agreement.

“I have never worked with a contract; only a handshake,” said the captain of a yacht of 80-100 feet with the owner less than a year. “I’ve never had any issues when it was time to go.”


For those with a policy manual, we wanted to known Does it include provisions for severance pay?

This surprised us, too. We figured if there was a policy manual, it would include something about severance pay. Most don’t.


More than 60 percent of our respondents said their policy manual doesn’t mention severance pay; about 37 percent do. About 2.4 percent didn’t know.

“Generally speaking, onboard well managed yachts, mainly commercial where we do have contracts, is a general practice to include this in a clause within the contract,” said the captain of a yacht larger than 220 feet. “It may vary from two weeks onward. This is independent of what the owner may give as a bonus for the good sale of the yacht.”

“Severance pay, wow, that would be nice, but in 16 years in the business, severance pay is the last thing on any of my owners’ minds,” said the captain of a yacht 140-160 feet. “You get your month’s notice, if you are lucky. The owners probably have severance pay in their on-land companies, but somehow we get thought of as just ‘the captain running our toy.’ That’s where owners need to change.”


We were curious to learn if there is a standard for severance, so asked What is your severance pay?

Answers varied widely, from one month’s salary to one year’s salary. Most, though, were one month’s salary (almost 30 percent) or one month’s salary per year of service (almost 25 percent).

“Your choices listed above are not realistic for an industry that has no loyalty from crew who want more than they give,” said the captain of a yacht 180-200 feet.


More than 30 percent of respondents chose “other” and offered a range of options: 10 percent of the sales price; two weeks if fired, one month if the boat sells; two weeks per year of employment up to five years, one month per year up to 10 years; benefits continue for three months; and others.

“I believe that crew that have remained aboard for a solid period and are in good standing should be shown some gratitude at the point of departure,” said the captain of a yacht 80-100 feet with the vessel less than two years. “However if the crew member leaves of his own deciding, unless a contract states that he/she would be given a severance pay, it should not be expected.


“If the owner sells the boat and does not take the crew on to another boat, then I believe some form of monetary compensation be given,” this captain said. “I am sure this all depends on the owner’s budget, the economy, the crew member’s relationship with the owner and whether or not there is an employment contract specifying policies for this situation.”


Many respondents had individual agreements with the yacht owner for their severance.

“The boat is for sale,” said the captain of a yacht less than 80 feet with the boss 6-8 years. “If I stay until the boat sells, I get six months severance. If I leave before, I get three.”

“We are for sale and the owner has decided to reduce the crew down to a minimum,” said the captain of a yacht 120-140 feet aboard almost 10 years. “Crew who have been released have been given two months [pay] for more than 1 year [worked], three months for two years or more.”


As the financial and business worlds have changed in the the past four years, we wondered if severance were more than a nostalgic dream, so we asked Do you expect a severance when you leave the yacht?

Most no longer do. Nearly 50 percent of respondents agreed that, while it would be nice, they no longer expect a severance package when they leave the yacht.


The next largest group, however, was the opposite. Nearly a third expect the full amount as described in the policy manual.


The bulk of the rest — almost 20 percent — expect something, even if it’s not what was promised.

“On two different yachts (one I worked for the family for 6.5 years and I was with the second family for 17 years) I did not receive severance in the amount promised,” said the captain of a yacht 120-140 feet. “The yachting industry is a joke when it comes to this issue and promises made are rarely kept.”


Just one respondent didn’t expect anything at all, and noted that that’s just the way the economy is.

We looked at these numbers closer to see if length of vessel made a difference, following the assumption that larger yachts are operated more corporately and therefore more likely to follow such shore-based employment standards.


We were right. Among respondents on yachts larger than 180 feet, nearly 70 percent expected the full severance amount as described in the policy manual.

The remainder didn’t expect a severance, but acknowledged it would be nice.


Among captains and crew on vessels smaller than 180 feet, a full half weren’t expecting anything. Less than a quarter expected the full amount. 


We were also curious to learn if tenure played a part in this. Would a captain or crew member with longevity be more likely to expect a severance package?

Of course. Among those with more than 12 years on their vessels, a third expected the full amount and 41.7 percent expected something. Just a quarter of respondents weren’t expecting a severance.


Among those with less than 12 years, the middle ground shifted: 31.4 percent expected the full amount, 15.7 percent expected something; and 52.8 percent didn’t expect anything at all.


Have other crew members who have left the yacht in the past year received severance pay?

More have not gotten one than have. Almost 49 percent said they have not; a tad more than 40 percent have. Eleven percent of respondents didn’t know.

“The owner says one thing and in reality he does not wish to pay any severance when the time comes,” said the captain of a yacht 180-200 feet aboard 2-4 years. “This has happened to other crew members and senior officers, so I know that it will happen to me.”


In an effort to see if yacht crew could expect to be treated as land-based employees are, we asked Does the owner currently offer severance pay to employees in his land-based business?

Most respondents — almost 70 percent — didn’t know. Of those who knew, more said yes, land-based employees still received their severances.


But maybe severance packages aren’t the only thing put on hold in the past few years. We wondered Have you received predetermined salary bonuses and pay raises in the past two years?

The largest group of respondents — 41.8 percent — said they had not. All raises and bonuses had stopped.


Yet the next largest group — 36.7 percent — said they had received every raise and bonuses as expected.

The remainder, 21.5 percent, had gotten some raises and bonuses, but not all of them.


Combined, more than 58 percent of respondents had gotten some or all of their bonuses and raises in the past two years.


We crunched these numbers further to see if the size of the vessel had anything to do with it. It did. Among respondents on vessels of 160 feet or larger, nearly three-quarters had received every bonus and raise as expected, and an additional 11 percent had gotten some of them. Just 16.7 percent noted that raises and bonuses had stopped.


Among respondents on vessels smaller than 160 feet, slightly more than 50 percent had received all or some of their predetermined raises and bonuses. Slightly less than 50 percent got nothing.

We thought tenure might play a part in this trend as well, but we were wrong. In fact, captains and crew new to a vessel — those with less than two years onboard — were four times more likely to get raises and bonuses than those onboard more than 12 years.


Among those aboard more than 12 years, a full 75 percent said they had received no bonuses or raises in the past two years, whereas just a third of respondents aboard less than two years went without.


Despite the financial realities of the current economy, we were curious if yacht crew should expect severance for their time aboard, so we asked Do you think yacht owners should offer severance pay to yacht crew who leave in good standing?

The answers were interesting. Most — 52.4 percent — said a severance would be nice, but it’s not necessary. Almost as many — 46.4 percent — said yacht crew should absolutely receive a severance. Just one respondent said no.

“When you take a position at a certain salary, that is what you should expect unless more is offered, which is rare,” said the captain of a yacht 140-160 feet aboard less than four years. “Be happy you get what is deserved. Anything above that is dessert.”

 

Lucy Chabot Reed is editor of The Triton. Comments on this survey are welcome at lucy@the-triton.com. We conduct our monthly surveys online. All captains and crew members are welcome to participate. If you haven’t been invited to take our surveys and would like to be, e-mail lucy@the-triton.com to be added.


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