02 January 2002
Company directors get record golden farewells
A record 14 company executives received golden handshakes of over ?1 million in the latest accounting year, a survey in Labour Research reveals. This is by far the highest number of seven-figure golden goodbyes traced in regular surveys conducted by the magazine.
The investigation, which found 75 directors receiving leaving presents of ?100,000 or more, shows that companies are paying little heed to calls for restraint on directors' rewards.
Top of the list was the ?9.1 million retirement gift paid to Klaus Esser, who headed German telecoms group Mannesmann before it was taken over by the UK group Vodafone. The pay-off is being investigated by the Dusseldorf state prosecutor.
Fourteen of the companies in the list of ?100,000-plus golden handshakes made more than one large pay-off in the year. For example, energy group BG paid out three six-figure executive golden goodbyes in the period covered following the demerger of its Lattice Group.
Labour Research found that companies do not appear to be abiding by the code of best practice proposed by the Greenbury committee in the mid-1990s. This recommended that the "broad aim" of the provision of golden handshakes to directors "should be to avoid rewarding poor performance".
The issue was brought into sharp focus last September when telecoms company Marconi was due to pay chief executive Lord Simpson a golden handshake of ?1 million plus a pension payment of ?2.5 million after bringing the company to the brink of collapse. Protest by City investors cut the cash payment down to ?300,000.
Notes to editors
1 The survey covers golden handshakes reported in the annual reports of companies with financial years ending at or after September 2000. It excludes the Marconi pay-offs, which will be published this year.
2 A list of all directors receiving golden handshakes of ?100,000 or more and further details are published in the January 2002 issue of Labour Research.
3 Labour Research is published by the Labour Research Department, an independent trade union and labour movement organisation founded 90 years ago. More than 1,800 trade union organisations, including 55 national unions representing 99% of total TUC membership, are affiliated.
4 For further information contact Neal Moister on 0207 902 9818.