Get used to it.

I like Tim, but there should have been severance of exactly $0.

Take a hint from a company like Apple, who’s top executives have no employment contracts and no severance plans. No one should get paid to quit a position like that.

From the Apple Inc. proxy statement:

“No Employment Agreements or Other Arrangements

The named executive officers are employed at will. Based on the Company’s philosophy that its executive compensation program should be simple and directly linked to performance, the compensation program for the named executive officers does not include any of the following pay practices:
• Employment agreements;
• Severance arrangements;
• Cash payments in connection with a change in control of the Company;
• Tax reimbursements; or
• Supplemental executive retirement benefits.”

Wouldn’t it be nice if government and quasi-governmental organizations started following a similar practice?

Someone correct me if I’m wrong. When a person resigns from a position, of their own accord, they ususally are not entitled to any form of severance??? Unless Mr.
McEwen got a sweet heart deal from his employer….us.

This just in ……

“Jan. 10, 2012 (Bloomberg) — Apple Inc. Chief Executive Officer Tim Cook will receive compensation for 2011 worth $378 million, boosted by restricted stock awards that are payable over the coming decade.

The total includes $376.2 million in shares that will vest starting in five years, Cupertino, California-based Apple said yesterday in a proxy filing to shareholders. Cook’s base salary was $900,000 in 2011. The company, which plans to hold its annual shareholder meeting on Feb. 23, had previously disclosed that Cook received 1 million restricted shares in August.

Apple’s board, now led by Chairman Art Levinson, offered the stock options to Cook to help ensure that he doesn’t pursue other job prospects. “No formula or peer group benchmark” was used to calculate the amount, the company said in the filing. Steve Jobs, who passed the reins to Cook before his death in October, had given input about the pay package.”

http://www.google.ca/search?sourceid=navclient&ie=UTF-8&rlz=1T4ADRA_enCA423CA423&q=apple+top+executive+compensation

I am sure that the CEO of Apple would not be concerned too much about a severance package …..

While you are right about the semantics, bohemian, there is somethng lacking in your full disclosure of the real situation.

detoe: “Someone correct me if I’m wrong. When a person resigns from a position, of their own accord, they ususally are not entitled to any form of severance??? Unless Mr. McEwen got a sweet heart deal from his employer….us.”

Bingo!

A best practices employment contract protects both the employer and employee.

That means that one of the events that would be covered is early termination of the contract by either party.

In both cases, there can be termination for cause. Most people understand the termination for cause by the employer for non-performance by the employee.

There is also the situation where an employee can terminate for cause of non-performance of the employer, especially in the case of “constructive dismissal”.

Constructive dismissal occurs when employees resign because their employer’s behaviour has become so intolerable or made life so difficult that the employee has no choice but to resign. Because the resignation was not truly voluntary, it is in effect a termination.

That leads to the employee’s obligations ending and the employee acquiring the right to make claims against the employer.

Whether that happened, I do not know. I suspect that is what happened in the case of UNBC’s past president, and I posted as much at the time.

So, the air can be cleared by making a disclosure in the case of public officials.

Gus,

Tim Cook did not receive compensation of $378 million in 2011.

Those securities vest in time; 50% in 5 years and 50% in 10 years. He only gets them if he’s with the company then.

Tim Cook has been with Apple Inc for 14 years. Check out the stock performance of AAPL for the last decade or so, when he was COO, acting CEO and now CEO. I think his compensation has been fair.

As an owner of 94 shares of AAPL, I approve of every penny.

Furthermore, the policy extends to a number of named executives, such as Scott Forestall and Eddie Cue, who did not receive 1,000,000 shares.

Not to be too harsh on Tim, but on the upside is the fact his severance is taxable. 45% maybe? Just like our income, and whatever he spends it on will be taxed at 12%. See? It all works out. Nobody gets rich in this country.

Why would anyone ever compare a company such as Apple with an economic development orgasnization of a small town in the middle of nowhere? Boggles the mind.

Must be the salt in the air. ;-)

Unless it ends up in offshore investments.

Who cares bohemian …. it is a different league.

You are trying to compare Apples to Tim bits.

;-)

Your comparing a Subaru to a BMW.

Gee!! I wonder if i would get severance pay for quiting? Or E.I. for that matter.

http://www.consumerreports.org/cro/cars/new-cars/buying-advice/who-makes-the-best-cars/overview/index.htm

So does Consumer Reports. :-)

it should be interesting to see the details of mcewans deal and while the city is in the mode of releasing information they should come clean on how much severance the previous mayor got when he left after the election. Betcha he got a nice check.

And then they can fess up how much of our bucks were spent on legal fees chasing skakun who was just doing his job in leaking confidential info to the media.

Apples to Tim bits…hahahaha ….Awesome!

I doubt if McEwen or anyone else could just resign and get a severance package, by claiming that their employers behaviour has become intolerable. It might happen in the airy fairy world of politics, but even then I would think that there would be an onus on the employee to show that his employer was intolerable, before any payment was paid. In the real world a claim such as this would be disputed by the employer.

In this case the intolerable employer, would have to be the City, as it is highly unlikey that the board of directors (who as stated above are volunteers) would be intolerable to the CEO of IPG.

So what is really happening.

1. There is an announcement that McEwen is resigning his position, and no indication that he is moving to another job or location.

2. At a later date the Mayor states that there will in fact be a severance payment, however this information etc;, will be handled by the IPG board of directors, and she (and others) further indicate that they do not have any direct control over IPG.

3. The IPG board will not disclose what the severance package will be, because that information is deemed (in their opinion) to be confidential.

4.Faced with a Freedom of Information request they now state that they will in fact release the information. Albeit after the departure of McEwen.

5. So we now have a situation where a person has resigned (or not) and was given a severance package. This of course begs the question. Can you really resign and get a severance. What criteria do you have to meet. What is the criteria in this case.

6. We also will wait with bated breath to see if the position is filled, and who will fill it.

It seems to me that the City cannot have it both ways. Being the only shareholder in IPG, and funding them to the tune of $1 Million or more per year, but stating that they have no control over them. **Highly unlikly scenario**

So the question is. Will we just get the amount of the severance package, or will we get some details as to why the person was entitled to the severance.

Gus,

Good policy is good policy, regardless of the organization.

How about executives got paid to go to work and perform, and when they move on from an organization, they simply move on, not get rewarded will all kinds of severance and perks? They ALREADY got paid.

I think severance in general is bunk. If you work for an organization for 20 years, and your job is eliminated, so what? You were PAID for the work you did. Why are you owed anything else?

Furthermore, what has length of service to an organization have to do with impact/value created anyway?

The entire concept of severance is so 20th Century.

And btw; clear air = clear thinking.

I think you do not understand the corporate structure of IPG, Palopu.

—————————-
“I doubt if McEwen or anyone else could just resign and get a severance package, by claiming that their employers behaviour has become intolerable”

You may doubt it, but it can and does happen. Do a bit of exploring around the issue.

http://zvulony.ca/2010/articles/employment-law/what-is-constructive-dismissal

“If, however, the employee is constructively dismissed, the effect is the same as if the employer had wrongfully dismissed the employee (i.e. not provided reasonable notice or just cause). With constructive dismissal, the employee is, therefore, entitled to the same notice period and or compensation in lieu of notice as if they had been wrongfully dismissed.”

I do not know what happened. I am simply saying that is now becoming a plausible scenario. Two people staring each other down across a table. The first one to blink loses….

Gus. Not sure the corporate structure of IPG comes into play. At this point we know nothing, except that we have a resignation, and a severance package.

Naturally there was an agreement before his departure, and naturally they will try and keep as much as possible under wraps.

We may be seeing the first part of the old saying.

**A new broom sweeps clean**

Perhaps there are other **resignations** to come.

If so, one has to wonder just how expensive is this **New Broom**

Anyone have any guesses as to how much the severance payment was when it will be announced? It wouldn’t be as high as six figures, would it?

Palopu, you wrote: “In this case the intolerable employer, would have to be the City” …. it is those words which caused me to write that “I think you do not understand the corporate structure of IPG”.

The employer is IPG, the employee is Tim McEwen.

Tim likely was not just a simple employee, he likely had a contract and one which may have been renewed recently.

IPG, in turn, has a contract with the City, not Tim McEwen. The city may have put some pressure on the Board of IPG, and the Board, in turn, may have put some pressure on Tim.

All of this is, of course conjecture. What actually transpired is something that we do not know.

One thing I do know is that the letter of resignation was well crafted in order to make no enemies. That tells me that the prospects he has, which may need some budget approval, thus pointing to another government position, likely a new one, will mean he is contemplating working within the same circles and needs to maintain a good working relationship.

I wish him the best of luck, and if he got the upper hand in this parting of ways, good on him! It may just be one of those rare win win situations.

Johnny Belt … in my opinion that would depend on how long the remaining term of the contract was, how sure any new job “offer” is, if the position is a new one, how quickly he can start to actually work at it, whether the contract had an incentive clause for employment longevity, etc. etc.

Just hold onto your horses. We will know some or all of the gory details shortly from the looks of it.

Wouldn’t it be interesting if he managed to land a position in the new Municipal Auditor’s Department. ;-)

I hear that Walmart is favouring Tim over me as their new chief executive greeter.

metalman.

I thought the whole reason IPG was set up was so that they are legally considered an independent corporation and as such are under no obligation to release anything under freedom of information?

That is why the BC liberals privatized the tourism marketing organizations… no obligation to pay the workers civil service union rates ($10 an hour), and opportunity to pay CEO’s 6-figure incomes to run an office of 6, working part-time with all the frills of traveling the globe.

I’d be very interested to see if this freedom of information request will even be answered. If so it could open up a whole new can of worms for the provincial government and their insider golden handshakes.