A global survey has found that most termination and severance packages for senior executives fall well short of the fabulous payouts that some corporate high-fliers are reported to have received in recent years.
Most companies adopt a limit of four or fewer weeks of severance pay for each year of service for their top executives, according to the survey conducted by global career transition and organisational consulting firm Right Management Consultants.
Though this varies across different countries, only 44 per cent of the Hong Kong firms that responded to the survey gave one month or more per year of service to departing executives.
The survey findings show that termination practices are primarily governed and shaped by the local ordinance.
However, companies also have the discretion to shape their termination practices. In Hong Kong, 60 per cent of the respondent firms said a combination of local law and company practice governed the policies.
In general, corporations in Australia and Japan are more generous on severance issues than other countries in the Asia-Pacific region, the survey found.