While it promised the world and delivered virtually nothing in relation to carbon emissions, the Federal Government released an exposure draft with respect to "golden handshakes" which appears to be a solid first step towards reducing executive largesse. The Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009, which was announced yesterday, seeks to restrict the ability for companies from paying "golden handshakes" (specifically, termination payments which exceed one year’s salary) to departing executives without shareholder approval.

The draft Bill appears to tick the relevant boxes -- instead of requiring approval for termination payments which exceed seven times total remuneration, the threshold has been suitably reduced to one year’s base salary. (This is a significant drop -- for example, in the case of departing Telstra CEO, Sol Trujillo, the proposed laws would reduce the ability to make a termination payment (without the need for shareholder approval) from more than $70 million to only $3 million.