Golden handshakes for company executives are on the up, despite a parallel rise in the number of business failures in the UK.
A study by workforce monitors Labour Research found that a record 14 company bosses received pay-offs of more than £1m when they stood down last year. Over 75 received in excess of £100,000.
And former IT and telecoms executives are no exception. Klaus Esser, former head of German telecoms group Mannesmann, received the biggest pay-off – over £9.1m – just before the company was taken over by Vodaphone. Sir Peter Bonfield, of BT, received a payoff worth £820,000.
But credit rating agency Dun & Bradstreet said the number of business failures in London rose by 8.3% in 2001.
And the glut of golden goodbyes comes despite calls for restraint on directors’ rewards and criticism that many executive pay-offs seem unrelated to performance.
Labour Research found that companies are shunning best practice proposed in the mid 1990s, which recommended that the broad aim of golden handshakes to directors should be to avoid rewarding poor performance.
Peter Skyte, national secretary of IT union MSF, said the survey highlighted the ever increasing divide between corporate fat cats and the way in which other employees are treated when they are no longer required.
‘Top executives have considerably more influence in corporate decisions and outcomes than other employees and should not be rewarded with golden goodbyes or kings’ ransoms for failure,’ he said.
Top IT and telecoms pay-offs of 2001