Follow Me On
The Woman in White Marble

{Click Marble or visit Books in the main menu}

Dis-Ease: Living with Prostate Cancer

{Click or visit Books in the main menu}

« One Crazy Idea: Power to the People (Not the Candidate) | Main | A Charter for Democracy »

Welcome to the World of Executive Garden Leave

In the UK the Co-operative Group has been going through very hard times. Euan Sutherland was brought in to save the day. As chief executives like to do, he brought in some fiends to help the cause. His yearly pay package was £3.6million. He was given a retention bonus equalling 100% of his first year’s salary regardless of performance. His staff were give retention bonuses adding up to at least £8milliom. (See Co-op chaos: chief executive quits 'ungovernable' group after pay furore).

According to Investopedia a retention bonus is:

A payment or reward outside of an employee's regular salary that is offered as an incentive to keep a key employee on the job during a particularly crucial business cycle, like a merger or acquisition, or during a crucial production period. In recent years, retention bonuses have become increasingly popular as corporate poaching has increased.

Unfortunately, retention payments aren’t worth much – well, they’re worth millions, but not worth much in actually retaining people. Sutherland quit after ten months, kept his retention bonus, and was paid off to the tune of £1million, which is the equivalent of twelve month’s base salary. Others of the senior staff brought in by Sutherland, paid £1million with equal retention bonuses, also skipped town. For example, the HR director quit after twelve months and got a £2.5million payoff (see Storm over £1m payoff for Co-operative group boss who quit job). Since the Co-op is still in dire straits, I’m thinking that ten to twelve months was not sufficient time to get through a “crucial business cycle”.

Apparently some Co-op members are upset about all these multi-million payoffs to executives, who didn’t stay in town long enough to find their favourite cafe, while at the same time the organisation is planning to make around 6,000 people redundant (I bet none of them got retention bonuses). All you can say to disgruntled Co-op members is: Oh, you silly people, get real!

The Co-op is trying to defuse the fury by reminding people that nothing is untoward. The retention bonus worth millions that don’t retain, the huge pay packages, the obscene payoffs, are all normal for chief executives. The Co-op board helpfully said:

Euan Sutherland was on a 12-month notice period as group chief executive. When he resigned in March, the board did not feel it appropriate to ask him to work his notice period and exercised its right to put him on gardening leave, which is normal practice for a senior executive.

Well, that settles it. All this is “normal”! Sutherland was on “gardening leave”. No, you are not looking at a surreal Salvador Dali painting. No, you are not listening to Stephen Hawking trying to explain the anti-intuitive nature of quantum physics. No, you are not reading a dystopia sci fi novel were a tiny elite live in a parallel existence sucking up vast amounts of wealth and recourses while the masses...Oh, wait. Maybe you are!

Just to avoid confusion, here's what a garden leave or gardening leave means:

The practice where an employee leaving a job – having resigned or otherwise had their employment terminated – is instructed to stay away from work during the notice period, while still remaining on the payroll. This practice is often used to prevent employees from taking with them up-to-date (and perhaps sensitive) information when they leave their current employer, especially when they are leaving to join a competitor.

The term originated in the British Civil Service where employees had the right to request special leave for exceptional purposes. "Gardening leave" became a euphemism for "suspended" as an employee who was formally suspended pending an investigation into their conduct would often request to be out of the office on special leave instead...

The term can also refer to the case of an employee sent home pending disciplinary proceedings, when they are between projects, or when, as a result of publicity, their presence at work is considered counter-productive.

We can talk nonstop about the abuses of the 2008 crash, the greed and criminality of the banks, and the almost complete failure of our elected officials to regulate the financial industry. We can share stories and anger about 6000 people being laid off while senior staff who quit just after they had started are paid off to the tune of millions. But the point is this: In the world in which the 1% live, this is all absolutely normal and, of course, legal (thanks to our elected officials). As the Co-op board said, all is OK because all is normal. Private jets and private elevators, all normal. Golden hellos, retention bonuses, and golden goodbyes, all perfectly normal. Several homes around the world, very normal. Government bailouts and friendly legislation so all this remains normal, again absolutely normal. So unless we are willing to change what is normal for the 1%, it doesn’t do much good complaining and getting angry.

The international financial industry and its executive class have created, though government legislative assistance and our own passivity, a parallel surreal reality which is very normal to them. They have worked hard and spent a lot of money to convince us that their normal is, well, normal, but it is not. None of us are given millions to not quit our job and given more millions to go “gardening”. And in case we forget, the millions and billions have to come from somewhere. The Co-op, for example, doesn’t have a magic pot of money that keeps refilling itself.

One thing is clear, however. Somewhere along the way I took a wrong turn on my career development path, which for me was pretty normal.  

Copyright © 2014 Dale Rominger

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>