Gardening leave

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The kiss of the sun for pardon,

The song of the birds for mirth,

One is nearer God’s heart in a garden

Than anywhere else on Earth.

—Dorothy Frances Gurney

A swizz, pure and simple.

The argument goes that each front office banker, salesperson and trader is so special and so important, and his departure will thus wreak such havoc on the forward prospects the bank (through the disclosure of client lists, trading strategies and the like) that he should be paid to sit at home doing nothing (“gardening” — ha!) from the moment he announces an intention to leave until the expiry of his notice period.

As a matter of solemn & immutable practice, therefore all such employees are frog-marched off the premises and “forced” to sit at home for between three and twelve months on full pay from the moment they resign: the more senior the employee, the longer the period at the greater monthly salary.

Now, a naïf might suppose that multinational investment banks should be made of sterner stuff, especially as they’ll generally have as many people arriving who can spill such wondrous secrets as they’ll lose in any given period. (Investment bankers are nothing if not fickle: the turnover is conservatively 10% per annum).

This is to forget that these sorts of micro-employment policies are set not by shareholders — did you ever hear the question of gardening leave come up at the AGM? — but by fellow employees, all of who fancy a similar deal as and when they switch jobs. Gardening leave is just one more manifestation that is to say, of the agency problem.

Investment banking pay is scandalous enough before you consider that one salary in ten in a given year is paid to the already departed.

See also

• Non-solicitation in a confi.
• Bonus