Australia will outlaw excessive "golden handshake" payments to company executives, the government said today, amid outrage over bonuses collected by bosses of troubled US insurer AIG.
Treasurer Wayne Swan and Corporate Law Minister Nick Sherry announced the crackdown, under which termination payouts worth more than a year's base pay would require shareholder approval.
"What we have seen for the past decade, under laws we have inherited from the former government, is the retirement gold watch replaced by a truck load of gold bullion," Sherry said.
"That's why we have decided to take some strong and decisive action and carry our major reform in this area of golden handshakes," he told reporters in the Australian capital.
The move, unveiled after Canberra acknowledged public "revulsion" over huge executive salaries, will extend the rules to cover a wider range of executives and will slap criminal penalties on those who flout the laws.
"Golden handshakes, particularly when companies have not performed or where workers are being retrenched, are simply a means of rewarding failure and are absolutely unacceptable," Swan told parliament. (AFP)