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Legislation to limit 'golden handshakes' paid to executives when they leave a company may just lead to higher salaries and sign-up bonuses, a Senate Inquiry has heard.
LEGISLATION to limit 'golden handshakes' paid to executives when they leave a company may just lead to higher salaries and sign-up bonuses, a Senate Inquiry has heard.
Draft laws were introduced by government in June in an effort to make it harder for companies to give their executives massive payouts. The Inquiry heard that current golden handshake payouts can reach up to seven times a director's total annual remuneration.
The Business Council has welcomed the review, but warns the draft laws will target middle managers and may change how remuneration packages are structured.
BCA policy director Peter Crone said the draft laws, which could see the threshold paid to departing executives reach as little as one year's base salary, will not achieve their desired outcome.
The company secretary of mining company Rio Tinto, Stephen Consedine, said the threshold should only apply to senior executives, saying the "one-times salary rule" would see middle management fall victim to its restrictions.
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