Executives receive lucrative severance packages in violation of regulations in Denmark

Departing executives and employees at various ministries and regions have received lucrative severance packages in violation of regulations, according to a report released today. The National Audit Office examined 98 severance agreements, known as golden handshakes, from four ministries and all five regions as part of a sample review.

The analysis reveals that these entities did not adhere to the rules in half of the agreements. Specifically, severance agreements should only be made in exceptional circumstances, which was not consistently respected. Additionally, some regions have hired managers who, from their first day of work, received better severance conditions than those outlined in standard contracts, a practice also permitted only in special cases.

Although the rule violations were deemed not severe enough for critical condemnation, the consistent nature of these breaches has raised concerns among auditors. It is against regulations to establish severance deals in connection with budget cuts or restructuring.

Examples of advantageous severance agreements show notable disparities between standard and enhanced conditions:

1. Region Hovedstaden: Standard package – 8 months; Enhanced package – 12 months + 450,000 DKK.
2. Region Midtjylland: Standard package – 8 months; Enhanced package – 12 months + 600,000 DKK.
3. Region Hovedstaden: Standard package – 10 months; Enhanced package – 12 months + 250,000 DKK.

Despite these findings, the Ministry of the Interior and Health, as well as the Ministry of Transport, have collectively entered into six such agreements related to financial cutbacks. It was noted that both Region Hovedstaden and Region Midtjylland provided severance terms exceeding standard agreements in half of their reviewed cases.

In one notable instance, Region Midtjylland paid out the highest severance of 4.4 million DKK to a departing executive. Among the four ministries reviewed, the Ministry of the Interior and Health awarded the largest severance payment, amounting to 1.2 million DKK.