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Belgium to cap executive golden parachutes-paper

Source: Reuters - Tue 1st Sep 2009

Belgium plans to limit payoffsfor outgoing executives of Belgian companies listed on the stockmarket to 12 months' pay, Belgian financial daily De Tijd reported on Tuesday.

The Belgian government has been planning the caps since the financial crisis broke out, particularly reflecting outcries over golden parachutes for executives leaving financial service companies which required state bailouts such as Fortis .

The new measure, which will be discussed on Tuesday, will only apply to new contracts, De Tijd said, adding that two exceptions apply to the 12-month salary payoff.

Companies can decide to give departing executives a higher payoff provided shareholders vote in favour of such a measure,and they can increase the payoff to 18 months salary in case a hostile takeover leaves the executive with no other choice than to step down.

A government spokesman was not immediately available forcomment.

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