Lapping it up: fat cats earn more than enough for two lifetimes
By Jessica Irvine | smh.com.au | 29 September
You could work every day of your life, for two lifetimes, and still earn less than what Australia's top executives are paid in one year.
As debate rages about fat-cat salaries, figures published by the Australian Council of Super Investors reveal the 10 highest paid chief executives received, on average, more than 200 times the average workers' salary last year.
While workers were paid an average of a little over $59,000, the 10 executives pocketed an average of nearly $13 million each, including base salary, bonuses and long-term incentives.
A former Macquarie banker, Allan Moss, topped the list, taking home $24.8 million, more than 400 times the average salary.
"But at least he [did] deliver shareholder return," said Ann Byrne, the chief executive of ACSI, whose annual pay survey has long highlighted a disconnect between executive pay and performance.
According to Ms Byrne, of the top 10 executives, "only two of their pay rises bore any relationship to shareholder return" – Mr Moss and the Leighton boss, Wal King.
For example, the pay packet of the former Telstra chief Sol Trujillo increased 14 per cent, despite a 2 per cent fall in total shareholder return.
The Productivity Commission is due to report tomorrow on its inquiry into executive pay headed by the former competition tsar Allan Fels. G20 leaders agreed at the weekend to link financial sector salaries to performance, including paying bonuses over a number of years.
Ms Byrne said bonuses should be based on at least three years' performance. And rises to base salaries should be curtailed to "bear some relationship to the increases they give their workforce".
The president of the Australian Council of Trade Unions, Sharan Burrow, said base salaries for executives should be limited to 10 times the average wage and bonuses should be voted on by shareholders.
Paying 200 times the average wage was obscene, she said. Since 2001 the base pay of the top 100 chief executives has increased 121 per cent, against a 38 per cent rise in average wages.
But a remuneration consultant, Peter McAuley rejected the comparison.
"It is an issue of supply and demand. "There is a limited supply of people that are capable of doing the job in very large companies."
First published by Smh.com.au on September 29 2009
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