Just say no to golden handshake

Switzerland has said "enough" with the golden handshakes and so should we. The latest is taxpayers having to pay out $425,000 for Lesley Longstone's early departure as boss of the Ministry of Education.

These payments have seeped into the private and public sector, often based on the facetious argument that they are needed to attract the best-quality managers.

Well, if recent experience is anything go by, let's try for second-tier staff. It will probably mean a better outcome.

Yes, not all of Lesley Longstone's issues with her job were her fault, but she must have known what she was walking into. And for people in management at the top of their game, well, working with politicians and unusual personalities is par for the course. So the deal struck over her early departure from the ministry, just one year into a five-year contract, seems generous, to say the least.

In a referendum, the Swiss have voted to ban golden handshakes or golden parachutes given to some executives when they join or leave a company. Bonuses paid for takeovers or for the sell-off of part of a business will also be banned. It's a massive step from a country which treats its well-off well; one in 10 families in Switzerland have more than $1 million and 10 per cent of the world's billionaires live in the country.

It could be argued that there is no comparison between Switzerland and New Zealand in terms of attracting top talent. But please refer to argument (a): Paying top whack to counter other deficiencies here doesn't appear to have brought blue-ribbon performance. And it is our state organisations, in particular, which seem to have fallen for this line.

Take Solid Energy. In a piece of digging worthy of a miner, Campbell Live told us on Monday in the 12 years from 2000 the SOE went from employing 23 people on a salary more than $100,000 to employing 472 people earning more than $100,000. That is not a typo.

The top salary in those years went from $190,000 to $1.34 million. That huge bump in salaries went hand-in-hand with a $389 million loss and the loss of hundreds of jobs.

Again, the argument that New Zealand has to pay top wages and bonuses to get the skills to run our enterprises seems asinine.

As dairy farmers grappled with a high dollar and falling prices, was the head of Fonterra really worth the $8.2 million he pocketed when he left last year? It's only fair to mention the Swiss action is not aimed at a super-successful dairy company, it's aimed at the banks and finance companies. But somewhere along the line, expectations for all chief executives have to be tempered.

The Swiss have realised we are in a different era. Let's hope the contract drawn up with the next Ministry of Education secretary doesn't make the mistakes of the last.