Walker’s severance likely a tidy sum

By Alicia Rimel

Published: June 29, 2008

When Waynesboro City Manager Doug Walker picks up his severance check today, he likely will walk away with a deal most Americans would envy, but one fairly typical for top government executives.
Officials have been mum on the details, which should be public once Walker receives his final payout. His contract calls for him to receive six months of salary along with accrued sick, vacation and compensatory time, among other benefits, such as $5,000 for outplacement services to help him find a new job.
That could push Walker close to his annual pay of $125,000. He will receive his severance money in one check.
Employees in the private sector typically must forgo unused sick and personal time and receive vacation pay based on the portion of the year already worked. Executives in both the private and public sectors frequently get far sweeter terms.
“These things usually come when you’re at a high enough level that you’re actually negotiating a package when you begin a job, that’s when you get severance pay,” said Linda Lampkin, research director for the Economic Research Institute in Redmond, Wash.
Such packages are enhanced by high salary. Walker’s annual pay of $125,000 is a third higher than the average salary of $92,799 for a city manager or chief administrative officer in local government, according to the U.S. Department of Labor’s 2008-09 Career Guide to Industries. His starting pay in 2003 was $105,000.
The median annual household income in Waynesboro, adjusted for inflation from 2000 census statistics, is less than $40,000.
But accompanying higher pay for city government executives is higher vocational risk, as Walker’s situation attests.
After gaining control of the City Council in sweeping election victories May 6, a faction led by Councilman Frank Lucente told Walker he could resign or be fired once the new majority takes over. Bruce Allen will be sworn in Tuesday and will team with Lucente and Tim Williams to form the council’s new power bloc.
That group considered Walker an ally of the current council majority of Mayor Tom Reynolds, Vice Mayor Nancy Dowdy and Councilwoman Lorie Smith.
Assistant City Manager Mike Hamp will take over Walker’s job on an interim basis starting tomorrow while the City Council searches for a permanent replacement.
City managers work at the council’s behest, meaning that when political tides shift, their jobs sometimes are in jeopardy. Unlike most American workers, city managers can be fired without cause.
That makes severance packages a key part of negotiations for city administrators. Severance pay is the amount of compensation an employee receives upon termination of employment. Packages vary, typically based on length of time served, and are negotiated directly between the employer and employee.
“It’s very variable, depending on under what agreement you came in with and the circumstances of being laid off,” Lampkin said.
The purpose of severance packages, especially in high-ranking positions, is to ease the transition from the current employee to the next.
Severance packages also are a way for administrators to say, “‘If you want to buy me out of the deal and get me to resign quietly and go away, this is what you need to pay me,’ ” Lampkin said. “If they just didn’t like his style, they’re going to have a problem getting rid of someone they don’t like, so it’s worthwhile, from [the employer’s] point of view, to negotiate.”
The average working American is not so lucky. Most of the time, “if the average Joe resigns, they get nothing.” Lampkin said.
Severance pay does kick in under other scenarios, Lampkin said.
“If [an employer] shuts down, typically you may get a week’s pay for each year of service, but that depends on the circumstance of the shut down,” she said.
Also, if a company is slashing its workforce, compensation might be in order for workers pushed out the door.
“If an employer is trying to prune their workforce to avoid layoffs, [a worker] might get more severance and health care coverage for a year,” Lampkin said. “Those kinds of incentives are common.”