Don and Doug's golden handshakes prompt howls of rage

So Don Elder is being paid $250,000 to remain with debt-laden Solid Energy for another four months, working from home as an adviser.

And Doug Heffernan will receive a special "retention" payout of $500,000 for staying on to oversee Might River Power's partial privatisation.

Does anyone really care?

Well, Labour certainly does, with its state-owned enterprises spokesman Clayton Cosgrove slamming the payment to Dr Elder as being a golden handshake.

“He is getting a big chunk of dough from the taxpayer for doing nothing,” an indignant Mr Cosgrove bellowed.

And a commenter to NBR ONLINE is equally indignant about Mr Heffernan’s payout.

“This is obscene and morally indefensible – we grizzle and grumble about beneficiary fraudsters, drug dealers and low-life criminals, yet this sort of 'special payout' is far more damaging.”

So, in an instant the debate over golden handshakes is back in the headlines, sending “concerned” citizens into paroxysms of rage.

Not that this surprises employment law specialist Peter Cullen, who told NBR ONLINE public opinion is almost always against senior officials receiving golden handshakes.

“The public view is that these senior officials, normally chief executives, are fat cats who are overpaid to begin with, let alone getting more money from the public trough to make them go.

“Often they are assumed to be seriously blameworthy, but life is not as simple as that.

“If they are being moved on without a proper justification they are perfectly entitled to demand a sum of money if they are to leave peacefully.”

Moderation must be exercised

So it is no surprise that Mr Cullen believes golden handshakes are acceptable, albeit with the rider that moderation must be exercised in the public sector given taxpayer money is involved.

Public sector payouts in recent years have ranged from around $430,000 for Lesley Longstone when she stepped down as secretary of education to $349,000 paid to the former ceo of the Rodney District Council, Rodger Kerr-Newell, when he was made redundant as a result of the Auckland Council amalgamation process.

Private sector payouts are in another league altogether.

Fonterra paid its former ceo Andrew Ferrier $8.2 million when he left the co-operative in 2011, while former PGG Wrightson managing director Tim Miles received $3 million when he quit in 2010.

Of course, it is not just New Zealanders who go into a tailspin over golden handshakes.

Such was the feeling in Switzerland this year over a $94 million severance payment to the chairman of pharmaceutical company Novartis, Daniel Vasella, that a public referendum was held on golden handshakes.

It resulted in an overwhelming “thumbs down” to such payments and the issue is now before the Swiss parliament.

Mr Vasella has since decided not to accept the money.

The Dutch are also up in arms and the government is preparing a bill that will cap golden handshakes in that country at 75,000 euros.

Whether New Zealanders are of a mind to do something similar here is far from clear, but those incensed at such payouts should vent their wrath on the Americans.

They instigated golden handshakes in the 1980s in a bid to get high flying ceos to turn around ailing companies.

rvaughan@nbr.co.nz