As Adam Shwab writes in Crikey today it is in the middle of a global recession that you would expect to see some restraint in excessive corporate salaries. Hell no. As Shwab points out in corporate Australia executives are paid extremely well during the good times and even better during the bad times.
At the same time that corporate leaders pontificate about the tough times and destroy trillions of dollars of wealth and millions lose their jobs, life savings and retirement funds, corporate exectives contunite to ratchet up their salaries and remuneration.
As the company annual return season unfolds the gravy train of outrageous executive remuneration continues. On top of the $11 m paid to the outgoing Qantas CEO for 5 months work, in the last week we have seen:
- Woolworths CEO salary leap from $6.9 million to a record $8.3 million
- Wesfarmers CEO pocket a 60% pay rise from $5.06 million to $8.12m
- BHP CEO pocket a $51% pay rise
- Commonwealth Bank CEO pay packet is up 23% from $8.66m to $10.07m
Here's what Adam Schwab had to say in Crikey about one of these- the Wesfarmers decision:
"Not only did Wesfarmers appear to completely ignore its shareholders’ views, the company also adopted little commercial sense. In the past two years, Wesfarmers return on equity (a key indicia of management performance) has dropped from 25.1% to 7.4% last year -- largely due to Goyder’s terribly timed acquisition of Coles Group.This week the Productivity Commission will release its long awaited Discussion Draft report into Executive Remuneration.
Despite the contradiction, Wesfarmers chairman (and also chair of the company's remuneration committee) Bob Every told the Australian Financial Review that there was no need for more regulation of executive pay and that "boards react to that and are adjusting. Australia has not seen the excesses of other parts of the world and so I personally think the system works quite well." Others may disagree with Every’s views -- especially Wesfarmers shareholders who have witnessed the value of their holdings sliced in half largely due to Wesfarmers' well-remunerated management."
It is expected that the Report will contain lots of tough talk but produce no real action. Like Kevin Rudd!!!