The proposed pay off — at a cost to the country of $24.7 million — comes after Kenya’s parliament dismissed the majority of wage demands of striking public sector workers, including doctors and teachers.
A worker earning the national minimum wage would have to work for 61 years in order to earn the amount the MPs have voted to pay themselves.
“It is totally ridiculous for the MPs to award themselves such an amount of money,” said Morris Odhiambo, who helped organise the demonstration.
The demonstrators, waving placards with messages such as “MPs are thieves” and “greedy hyenas”, marched through central Nairobi to parliament.
“We want them to know that the public mood is against this unjustified increment,” said Robert Alai, another of the organisers.
Kenyan lawmakers are already some of the best paid on the continent, with a tax-free monthly salary of some $13,000.
Legislators introduced an amendment Thursday that would see them paid a total of 2.1 billion shillings ($24.7 million, 19 million euros) in bonuses.
Each of the 222 members and the speaker would get $110,800 (85,700 euros) as a sendoff package at the end of their current term.
“How come our teachers had to strike for three weeks to get a salary hike, yet within a single sitting the MPs could easily increase their remuneration,” Odhiambo said. “So where is the two billion shillings going to come from?”
After weeks of negotiations, teachers were finally awarded a pay increase that would see the lowest paid take home a salary equivalent to $230 (175 euros) while the highest paid will earn $1725 (1317 euros).
The lowest paid doctor makes $1,666 (1,272 euro) while the highest paid takes home $3,571 or 2,727 euros).
The proposed golden handshake — which must still be ratified by President Mwai Kibaki — comes after the finance ministry has already proposed tax rises to pay for public sector wage increase demands.
Rights groups, including Transparency International and the Kenya Human Rights Commission, said in a joint statement the move was “extremely disturbing” and broke constitutional rules.
The statement called on Kenyans to let lawmakers “know that they are not willing to foot the cost of their greed.”
The sendoff bonus will only be paid to MPs who are not re-elected to sit in the new parliament.
However observers fear many MPs will pocket the bonus and then run for a different elective office.
Human rights defender and Presbyterian church minister Timothy Njoya said the MPs are “executing Kenyans” with their “abnormal” wage demands.
“They are breaking the necks of the poor… this is economic terrorism,” Njoya told AFP, adding that the hefty send off was “unjustified in these hard economic times.”
Prime Minister Raila Odinga has said he is “against the MP’s gratuity bonus.”
Kenya is due to hold in March 2013 the first general election since deadly post-poll violence four and half years ago.
Kenya’s government was propped up by some $270 million in foreign aid in 2010-2011, according to official figures, and faces a $1.6 billion deficit in the year ahead.
Earlier this year parliament was refurbished at a cost of over $11 million, kitted out with plush red leather seats for lawmakers each with a price tag of $2,400.