Salaries for CEOs should be capped at ten times an enterprise’s average wages and shareholders should be able to sue for poor executive performance, say unions.
The ACTU today released a new analysis showing the average pay for top CEOs has risen astronomically and is now 63 times average weekly earnings.
ACTU Secretary Jeff Lawrence said the national Congress of the Australian unions meeting this week in Brisbane (Tuesday 2-4 June) would consider an important new proposal to curb irresponsible behaviour by executives and impose stringent criteria on CEO pay and bonuses.
“Outrageous executive salaries and bonuses encouraged a culture of excessive risk-taking and short-term thinking that is widely acknowledged as a major cause of the Global Financial Crisis,” said Mr Lawrence.
“Year after year of virtually unlimited increases in CEO pay packets mean that executive remuneration is now out of all proportion with the work performed.
“Ordinary workers fail to see how the rise in executive pay and bonuses over the past decade can be justified when their own wages have risen much more slowly at 4.2% a year.
“In current tough economic times it is essential we do everything possible to secure jobs and make sure executives are not driven by personal greed but look to measures that promote the long-term sustainable performance of the company.
“The union proposal would return executive pay to a more realistic level, and link rewards and bonuses to the genuine growth and productivity of the enterprise, rather than the smoke-and-mirrors guesswork used by many company boards,” said Mr Lawrence.
Unions will be backing up a push for legal changes with a robust industrial campaign to curb executive pay and ensure all employees in an enterprise – not just the CEO – are appropriately and fairly rewarded for their contribution.
ACTU Congress (Tuesday – Thursday 2-4 June, Brisbane)
Job security, stronger rights for workers, and a vision for a more prosperous and equal Australia will be at the top of the agenda when more than five hundred delegates meet for the ACTU’s national Congress this week.
The triennial Congress in Brisbane will establish the union movement’s agenda for working Australians for the next three years.
“The new Fair Work Act is a great step forward from WorkChoices. But there is still plenty of unfinished business for unions, including one set of laws for all workers through the abolition of the Australian Building and Construction Commission,” Mr Lawrence said.