What is a buyout sum?

This is the amount that is paid to buy off an obligation, in other words, to get rid of a financial obligation in one go. This can occur, for example, upon the early termination of a contract, a severance payment, or the redemption of a life insurance policy or pension. The buy-out sum is often the result of negotiations or legal procedures and can be considerable, depending on the nature of the obligation and the circumstances.

Example: In the case of a dismissal, a buy-out sum can be paid to compensate the employer for the loss of work, as in the example of CBRE Nederland where a dismissed director received a buy-out sum of 865,000 euros.

Compare: Ransom