Retention arrangements and why you should be wary

I'm not a fan of retention arrangements because ultimately they won't stand in the way of a superior outside offer to the executive. This is not only because of the practice of companies offering sign-on awards or 'Golden Hellos' to new executives to make up for any remuneration forfeited on leaving the former role, but also because, well, people are people. There is probably no better illustration of why retention arrangements won't ensure retention than Transpacific Industries who today announced the resignation with immediate effect of the Cleanaway MD. A retention arrangement was entered into with this executive in August 2015. Transpacific Industries has a lot of turnover at the level above this. As I wrote back in July 2015 (VIEW LINK) Transpacific Industries' new CEO Vik Bansal is the fourth CEO in five years. Transpacific Industries' 2015 AGM is scheduled for 30 October 2015.