Last week, the International Brotherhood of Teamsters announced that Coca Cola had agreed to a change that requires it to get shareholder approval for generous severance payments that amount to at least 2.99 times the recipient's annual salary and bonus.

It was an extraordinary development because the fizzy drinks company has real form on this issue. In 2000, after just three years as chief executive, M. Douglas Ivester walked out with close to $120 million. Former Coca Cola president Steven J. Heyer got a package of $24 million and former chief executive Douglas N. Daft received more than $36 million in 2004.

Actually, the Coca Cola board got religion and approved the deal in October, but that was after some pressure. The directors had originally recommended a "no'' vote on the proposal, claiming it was putting too strict a standard on big payouts. They also reckoned putting it to a vote was too expensive. Every time that happened, they said, it would cost the company $2.5 million.

Gee, that's a lot of money. Almost as much as the $2.86 million bonus the company paid to chief executive E. Neville Isdell last year.

The board caved in when more than 40 per cent of the shares voted in favour of the proposal.

So is this the beginning of a trend? The Los Angeles Times points out that Coke is the latest in a series of companies that have given shareholders more say in severance packages. The list includes General Electric, Raytheon and Bank of America.

"There are emotional roots to these efforts: generous severance packages for high executives who didn't succeed don't go over well when companies are laying off workers, reducing pension contributions and forcing employees to absorb more of their healthcare costs. According to Institutional Shareholder Services, a firm that advises investors on corporate-governance issues, a majority of shareholders at more than 30 firms in the past two years have demanded veto power over severance packages. The heart of the issue is shareholders' loss of faith in company directors. They want executive pay and benefits to reflect how well or poorly the company is doing --- and in particular, how well its stock performs. Giving millions to executives who preside over languishing revenue and tumbling stock is akin in their minds to rewarding people for failing, something that's reasonable only in the clubby fantasy land of corporate boardrooms''

In Sunday's New York Times, Gretchen Morgenson says this is just the beginning.

"Forcing a shareholder vote when severance packages are more than 2.99 times salary and bonus should be just the beginning for activist owners. There is much more work to be done...It's obvious that me-first executives will do nothing to stop the compensation insanity. Their shareholders will have to do it for them. Here's hoping that in 2006, they are fully up to the task."

The piece suggests shareholders could also push for getting rid of these packages altogether when the executive already has a big wad of shares in the company that would deliver fat profits when there's a change of control. Putting a cap on severance payments is another idea.

With warnings that most employees will not get higher pay rises and bonuses in 2006, these sorts of sweetheart deals for corporate bureaucrats look more and more outrageous.

And corporate largesse doesn't just extend to the lolly execs get when they leave the company. What about the gross-ups that 52 percent of America's largest companies are giving their top executives to pay taxes due on corporate perks such as luxury cars and even on capital gains? If you have never heard of that, here's why: it's stuff that's buried in footnotes or attachments to other filings with the Securities and Exchange Commission.