Tougher action is needed to rein in executive salaries and bonuses: unions
30 September, 2009 | Media Release
Tougher action is needed to rein in executive pay and send a strong message to corporate Australia that the greed-fuelled risk-taking that led to the Global Financial Crisis will no longer be tolerated, say unions.
ACTU President Sharan Burrow said the Productivity Commission report had let working Australians down by not recommending a cap on excessive CEO pay.
“The commission has made some moves towards giving shareholders more say over the salaries and bonuses made to CEOs, but it should have gone much further,” Ms Burrow said.
“These are just baby steps when a big leap is needed.
“Tighter rules of corporate governance and increased board accountability and transparency are long overdue, and the proposed ‘two strikes’ rule to sack boards that repeatedly approve unacceptable remuneration packages is positive. But these are only minimal proposals that will not solve the problem.
“The Commission’s report confirms that the payments made to Australian CEOs have got way out of synch with the rest of the workforce and community expectations. Excessive CEO pay is one import from the United States – like the GFC – that Australia can do without.
“It is obscene that a company CEO is paid 50 times average weekly earnings. No-one is worth that sort of money.
“The outrageous multi-million salaries that have continued to be paid to Australian CEOs this year show corporate Australia has lost its moral compass.”
Ms Burrow said it was disappointing that the Commission had not recommended a strict cap on executive remuneration.
Unions have proposed that the salaries of company chiefs should be capped at a maximum 10 times the average earnings of employees within that company.
Companies should also be taxed at a higher rate for paying CEO salaries over $1 million.
“Working Australians have made enormous sacrifices over the past year to help businesses survive the downturn, and it is both demoralising and hypocritical for CEOs to continue to be rewarded with bulging pay packets.
“Employees should not be the only ones bearing the burden of the economic downturn,” Ms Burrow said.
“Excessive salaries and bonuses contributed to the GFC by encouraging risk-taking and short-term thinking that undermined the sustainability of businesses and the financial system.
“We cannot afford a continuation of business as usual that led to the GFC. Tough action on CEO pay is needed to prevent a repeat of the global economic crisis.”
Contact Details
Mark Phillips
Ph: (03) 8676 7266
Mob: 0422 009 011
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