“The O’Reilly Factor” gave Fox its highest-rated prime-time show until he was let go after The New York Times unveiled that O’Reilly and Fox settled for about $13 million with five women over sexual harassment allegations, as previously reported by PHRM. O’Reilly has denied the allegations.

Sources reported that the $25 million is equal to O’Reilly’s annual pay. While it is not unusual for employment contracts of star talent to include clauses that permit firing with zero severance if the employee was involved in unethical or criminal actions, Fox News was in a tough spot, says Alan Johnson, managing director at Johnson Associates, an executive pay consultancy in New York.

That’s because “none of the allegations against O'Reilly have been proved in a court, and the settlements all stipulated that O'Reilly didn't admit to any wrongdoing,” Johnson said. “So Fox News had to consider that O'Reilly probably would have sued the company if it didn't pay him a substantial severance package, and that the suit, as it was litigated, would have continued to keep the scandal in the public eye.” 

Companies facing similar circumstances "have to balance their legal rights not to pay severance with the negative effects of a prolonged negotiation or trial," he said.