The BBC’s Director General has resigned after only 54 days in post. Now there is concern that his £450,000 ‘Golden Handshake’ is disproportionate.
These controversies are not new. The payouts to bankers like Sir Fred Goodwin are well known, as is the money paid to Amnesty International’s outgoing Secretary General Irene Khan.
Complaints at these payouts comes from both the Right and the Left, depending on the recipient. The outrage is usually met with calls for the institution in question to take measures to recover the money somehow.
I have never had much sympathy with such demands, which seek to shut the door after the horse has bolted. We live by the rule of law in this country, and contracts must be adhered to. Top executives tend to be quite adept at securing the right assurances and insurances in their contracts, should they be asked to leave early.
The time to be outraged about Golden Handshakes is before the contract is signed. Whenever a high profile appointment is made at a Ministry or Quango, conscientious citizens and civic minded members of the Fourth Estate should scrutinise the terms of the contract. In particular, they should ask “what is the potential payout if this person is forced to resign due to mismanagement?” and “what is the payout if this person resigns after only 50 days in post?” A routine public spotlight at this stage would serve to inhibit egregious terms in such contracts. It may also serve to explain the circumstances where a large payout would be appropriate.
As luck would have it, we’ll have the perfect opportunity to do this soon, when a new BBC Director General is appointed.