The Federal Government today released draft legislation that proposes tough new penalties for breaching "golden handshakes" laws.
The Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 follows the Rudd Government's commitment in March 2009 to curb excessive termination payments to company executives.
A breach of the new laws could result in individual fines of $19,800, up from $2750. Corporations will face fines of $99,000, up from $16,500. Shareholders will also be given powers of veto over termination benefits.
Senator Nick Sherry, Minister for Superannuation and Corporate Law, said the legislation was a response to widespread community concerns about executive termination payments in light of the global financial crisis.
"There is significant and ongoing community concern about excessive pay, especially 'golden handshakes' and particularly at a time when many Australian families are being hit by the global recession," he said.
"In line with our commitment, the Rudd Government is going to legislate to address the issue of rampant golden handshakes - or termination payments - paid to company executives, frequently where the company has gone backwards,"
The Bill, which will be introduced into Parliament during the Winter sittings, will be open for public consultation for a four-week exposure period ending on 2 June, 2009.