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Forget The Bonus, The Real Money Is In Severance Pay

09/30/2015 01:34 EDT | Updated 09/29/2016 05:12 EDT

Neil Sedaka is right: breaking up is hard to do. It's also expensive.

On Sept. 15, residents of Vancouver learned that former chief administrator officer (CAO) Penny Ballem's services had been "concluded" that day by Mayor Gregor Robertson.

penny ballem

Ballem, 65, will receive $556,000 as a parting gift for the hastily arranged exit. News that undoubtedly warmed the cockles of the hearts of residents across the city when they learned of it.

Falling on the heels of word that Arvind Gupta will be paid $446,750 after he resigned as University of B.C. president in August, it's no wonder taxpayers are irate.

In just over a month, they're down $1 million, the same amount the B.C. government has pledged to help Syrian refugees.

Ballem's going-away deal isn't the exception that proves the rule. Sudbury's former CAO will deposit a severance cheque in the neighbourhood of $330,000 after he was let go earlier this year.

But nor is Ballem's deal the norm.

Fortunately -- depending upon your perspective -- there are two cities of comparable size that have parted ways with their CAOs in the last two years: Vancouver and Winnipeg.

Back when Ballem started at the city in 2009, she made $313,577, a nice bump from the $230,958 she was pulling down as a deputy minister in the B.C. government.

Last year, she made $334,617. Former Winnipeg CAO Phil Sheegl made $235,334 in 2013.

When Sheegl quit or was fired (take your pick), he walked away with $250,000.

'Peggers weren't happy about it, though Vancouverites might see it as a bit of a bargain.

When the top guns at city halls get canned, it's a pretty safe bet that a six-figure severance cheque is attached to ease the transition, but the vast majority of severance agreements fly by unnoticed.

In the six years from 2003 to 2008, Vancouver signed 31 agreements with its non-unionized staff. Severance ranged from one month to 18 months.

In the following six years, Vancouver signed another 49 agreements. Severance ranged from two weeks to 20 months.

One reason for the high number may lie in the "out with the old and in with the new" approach that comes with new mayors and their top staff in Vancouver.

When Larry Campbell took over as mayor, 10 severance agreements were signed within a year. When Sam Sullivan took over, nine agreements. And when Gregor Robertson took over, seven, some for up to 20 months in severance.

Over at Metro Vancouver after signing 10 agreements between 2012 and 2013, they kept it to one last year.

At the labyrinth otherwise known as TransLink, 13 severance agreements were inked in 2014 for between half a month and 15 months pay.

It might be an idea for Vancouver -- and the B.C. government for that matter -- to look to the Quebec government for a little guidance in negotiating contracts with senior staff.

Last month, the Quebec government fired the CEO of the Agence métropolitaine de transport, a regional transit service in the Montreal area.

Since it was a political choice, they had to pay severance, all $103,120 of it.

When the B.C. government axed the general manager of BC Place Stadium in 2013, he left with $460,140.

In the midst of a recent leadership crisis, seven of Manitoba Premier Greg Selinger's staff left with a total of $670,000 in severance, an average of $95,714 each -- or about half the $184,615 average that 13 members of former premier Gordon Campbell's staff pocketed in 2011.

In five years, ICBC paid out $25 million in severance, according to a 2012 government audit. To fix that mess the Crown corporation then spent another $2 million to say goodbye to seven more executives.

The Capital Regional District might want to sit in on any negotiating severance workshops as well.

The head of the CRD's Seaterra sewage program is walking away with $500,000 at the end of September. Residents are supposed to take some solace in the fact that it's meant to save money.

The big problem when severance cheques are so tempting is that there's little incentive to make things work, which goes to underscore a political cartoon captioned: "Who cares if we didn't get a bonus, the big money is in severance pay."

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