Some EU politicians are not happy with the large payouts companies make when executives depart. These so-called ‘golden hand-shakes’ have stirred controversy as average wages remain steady and inflation grows.
Corporate executives in Europe face renewed pressure over huge payouts that have little or no relation to their performance. This is happening at a time when inflation and stagnant wages diminish ordinary workers' purchasing power.
Chairman of the EU group of finance ministers, Jean-Claude Juncker, said his colleagues were considering action to clamp down on "scandalous" pay packages for senior executives who leave companies with few or no accomplishments.
"We believe that the excesses of captains of industries' (pay packages) that we have seen in several countries are really quite scandalous and we are continuing to examine what can be done," Juncker told journalists.
The so-called “golden hand-shakes,” large payments to senior executives when they leave a company, have stirred controversy recently after some corporate heavyweights received payouts despite leaving their companies in disgrace.
Although the European Commission began looking into excessive executive pay packages four years ago, only a few countries have taken action to tighten tax rules.
The Netherlands have led the way on clamping down on golden hand-shakes, with legislation in preparation to tax such pay-outs at a rate of 30 percent for people with annual salaries over 500,000 euros, on condition that the bonus is greater than the salary.