It used to be that when one was let go for unacceptable performance the rewards were few and far between. However it seems that nowadays the way for a senior executive to really make some money is to get fired. The latest example is the ouster of Home Depot's CEO Robert Nardelli. Despite the fact that the company’s stock had fallen over 8% in the six years he served as CEO he received a severance package worth approximately $210,000,000. Fortunately – this is far from the norm and most workers are happy to accept a few months salary when being let go.
Interestingly Jewish labor law does not, in theory at least, mandate the payment of severance. This is in keeping with the traditional Jewish notion, one that was prevalent until modern times, that workers were paid only for actual time worked. No sick pay, no vacation pay and no statutory holidays. It was only in the case of a slave that the Torah required severance. Having worked for six years with no economic capital to show for it the Torah demands that a slave is to be given some help towards his economic future. Unlike an employee he could not quit his job and thus his economic opportunities were essentially non-existent. While some have argued that if a slave, who was most commonly sold into slavery in order to pay for amounts he had stolen, is to be given severance then all the more so should other employees. The majority view, however, is that a legal obligation for severance does not exist for other workers.
Nonetheless Jewish authorities have strongly stated that giving severance is the ethical expectation. This is not only meant as help for the ex-employee but as a moral message to the employer. Having profited through the work of others the employer should show gratitude to G-d by sharing some of his wealth with those who most directly helped to accumulate it. Just as we want G-d to bestow kindness towards us we must do so to others. One of the greatest challenges facing us in the workplace is realizing that despite our hard work and business acumen our wealth is due to the benevolence of G-d. Many who work just as hard and are just as smart are oftentimes much less “successful”. What we tend to call a luck break is in reality the hand of G-d. Thus Judaism tries to inculcate the value of giving to others beyond our legal obligations, severance pay just being one of many examples.
However a golden parachute worth many millions is nothing less than obscene even if perfectly legal. Such packages highlight a common ethical challenge of the impersonal corporate world. Corporations, having their own legal identity and status can foster attitudes that would never exist if one were dealing with one’s personal money. Can one imagine a private corporation ever offering such a package? Somehow the money of shareholders is treated in a much more frivolous manner. Furthermore when senior management is hired by a board there exists a risk that executives will make decisions that benefit management and not the ultimate owners of the company, the shareholders themselves. It is in the board’s interest to offer outlandish compensation packages as such
riches often trickle down to compensation of board members, some of whom may no doubt attain senior executive positions.
Unfortunately the almighty dollar is the measure of corporate success. While Judaism embraces financial success, moral astuteness and ethical sensitivity are goals that if attained bring much greater riches.
Comments rabbijay@torahinmotion.org
Rabbi Jay Kelman is a Founding Director of Torah in Motion, an adult education institute dedicated to exploring the intellectual richness of Judaism and applying that wisdom to our everyday challenges. www.torahinmotion.org
Rabbi Jay who teaches Talmud and Ethics at TanenbaumCHAT a community High school of over 1,400 students in Toronto is a Chartered Accountant (CA)