In most cases an employee who resigns doesn’t get any sort of pay off at all. You give notice (or not) and when the notice ends the most you can expect to receive is pay for holiday accrued but not taken plus any outstanding commission or bonus that may be provided for in your contract.
So why is George Entwistle special? It has emerged that the shortest-serving Director-General of the BBC has walked away with a year’s salary of £450,000 which should go some way to cushioning what must nevertheless be a considerable blow.
There is an interesting explanation of the payment from Lord Patten in a letter he has sent to the Culture Media and Sport Committee. In it he says that on Saturday Mr Entwistle asked if ‘suitable terms’ could be reached for his resignation. Negotiations with his lawyers followed as a result of which the payment of one year’s salary was agreed. Had he simply given six months notice as provided for in his contract he would obviously have received just half that sum. However, had he been dismissed he would have (probably) been entitled to the full year.
I’m not criticising the deal. Getting rid of your top executive – within hours of him becoming a liability – for just a year’s basic pay strikes me as fair enough. Nor should we criticise Mr Entwistle for negotiating an exit on favourable terms; I’d have done the same myself.
But this wasn’t really a resignation was it? It was an agreed termination – an exit by mutual consent. Nothing wrong with that, of course, but I do wish it hadn’t been presented as though Mr Entwistle were some sort of Captain Oates figure. I don’t think there is anything wrong with what he did, but I don’t think he should be scoring extra points for ‘doing the honourable thing’. That would have meant genuinely resigning without notice, or accepting a payment in lieu of the 6 months notice he was supposed to give.
What Mr Entwistle has done is ‘a deal’ – but I suppose if he had come out to face the press on Saturday night said ‘I have decided to negotiate a favourable termination package’ it wouldn’t have sounded quite so noble.