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2009/07: Should CEO's salaries and termination payments be reduced? ?
Introduction to the media issue
Video clip at right: An ABC 7.30 Report report on the executive salaries controversy.
If you cannot see this clip, it will be because YouTube is blocked by your network. To view the clip, access from home or from a public library, or from another network which allows YouTube clips.
What they said...
'The recent financial crisis highlights the lack of correlation between ability and pay. While Australian and international financial executives have received enormous salaries, they have not protected their shareholders from billions of dollars worth of risky investments'
Dr Richard Denniss,October 2008
'The Government's announcement is ... is another childish attempt to blame our economic problems on executive greed'
Michael Costa, in an opinion piece published in The Australian on March 27, 2009
The issue at a glance
On February 5, 2009, the Obama administration in the United States announced that failing companies which had received financial assistance from the United States government would have the annual salaries of their chief executives capped at half a million US dollars.
The size of executive salaries attracted media attention in Australia after it was reported that the clothing manufacturer, Pacific Brands, had awarded its top executives rises worth millions of dollars. This followed soon after the company had announced that it would be taking much of its operation off shore and that 1,850 jobs would be lost within Australia.
On March 18, 2009, the Australian Government announced changes to the Corporations Act which would allow shareholders to veto executive payout packages that were larger than the executive's annual salary.
On the same day the federal Government asked the Australian Productivity Commission (PC) to examine how Australian company directors and executives are paid.
The debate over how much chief executives should be paid has been fuelled by the current world financial crisis.
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