||Issue No. 148||16 August 2002|
Interview: Labor Law
Unions: Critical Conditions
Bad Boss: Shifting The Load
History: Peeking Out
Safety: Flying High
Corporate: Salaries High, Performance Low
International: War on the US Wharves
Review: And the Signs Said...
Poetry: Tony Don't Preach
Satire: Latham Dumps Rodney Rude as Speech Writer
The Locker Room
Another Capitalist Party?
Justice For All?
Kill the Photos!
Right Wing Lackies
Salaries High, Performance Low
Profits are down for the top 500 companies but executive salaries are still on the rise. The total net profit of the top 500 listed companies in Australia fell 32 per cent for the latest half-year (which, for most companies, was the six months to December 31, 2001) yet executive salaries did not fall to match the poor performance ... in fact they rose about 7 per cent across the board.
Some senior executives did take cuts after their poor performance however these examples are limited and were far from proportionate with the drop in overall company profit.
National Australia Bank suffered a 52.5 per cent fall in net profit for the last 6 months, however Frank Cicutto still earned 2,927,291--a 7 per cent rise from the previous year. Woodside fell 37.9 per cent while CEO, J. Ankehurst's, salary rose 15.2 per cent to $2,081,110. Rio Tinto's profits fell 77.8 per cent and Leigh Clifford took a whopping 2.67 per cent pay cut to $2,355,404--how does he get by? AMP's net profit fell 54.2 per cent so Paul Batchelor felt it only fair he receive a 20 per cent pay cut to a measly $3,342,000.
Australian CEOs are the third-highest paid in the world after America's and Britain's. Chief executives now earn an average of $1.4 million - up 7 per cent on the previous year. The average wage is just under $40,000. A pensioner earns $200 a week, or $10,000 a year. In 1976, according to one estimate, CEOs earned three times the average wage. Today the average CEO, taking executive share options and bonuses into account, is paid 30 times the average wage. (source: The Australian)
Executives continue to expect full remuneration despite poor performances and increasingly, executives are walking away from bad situations with their bonuses. For instance, News Corporation went from a profit to a loss, the CFO still got a substantial bonus. Australian Gas Light Company with dwindling profits still made a large payment to the CEO. Pacific Dunlop has performed badly for some time, but again the departing CEO still got a bonus payment. Shareholders, through their boards, must enforce executive pay cuts in cases of poor performance--too few executives will take it upon themselves to do so. As one punter plainly put it "ANYONE could go in and lose a company $500 million...it takes a senior executive to expect to get paid for it."
CEO remuneration packages of the top 10 public companies
Profits down 77.8% and although CEO, Leigh Clifford's remuneration took a slight fall from the previous year--down 2.6 per cent--there was an overall 30 per cent rise in senior executive wages. The six highest paid executives pocketed $9,353,000 up from $7,255,139 the previous year.
R L Clifford: $2,355,404
National Australia Bank
Prior to its 52.5 per cent drop in profits, NAB spoke of a plan to cut $20 million from its senior executive salary pool and to halve bonuses paid to chief executive Frank Cicutto and other senior executives. However, Frank Cicutto's remuneration rose 24.7% to $ 1,921,408 and the top 5 executive salaries rose 31.7% to $7,493,373 from the 2000 total of $5,686,638.
Frank J Cicutto: $1,921,408
The economic downturn saw a 54.2per cent drop in this offshore investment giant. At the same time executive salaries took a battering. CEO, Paul Batchelor, took home $3,342,000 down from $4,192,000 the year previously and R. Yates took a massive decrease to $3,993,000, down from $5,734,000 the year before. One of very few, AMP's board stripped over 30 per cent off the wages of the top five executives from $15,839,000 to $10,451,000.
R. Yates: $3,993,000
QBE went from a profit to a loss as its executives imbibed huge salary increases. Frank O'Halloran had a 61 per cent salary increase to put him over the million mark. The top six executive salaries rose 30 per cent to $7,292,000 from $5,611,000...a huge increase when you consider $3 million of last years total was spent paying out retiring executive R. Grant.
FM O'Halloran: $1,139,000
Profits fell 37.9 per cent while Akehurst enjoyed a up 15.2 per cent pay increase. In all, the top five senior execs helped themselves to an 18.8 per cent increase from $5,267,167 the previous year to $6,260,469 this year.
JH Akehurst: $2,081,110
Ten Network Profits fell a whopping 80 per cent on the same time last year and remarkably John McAlpine celebrated with a 19.3 per cent pay rise. Overall, the top five executive salaries rose 6.1 per cent to $3,610,894.
J McAlpine: $1,163,333
This is an amazing story... just look at the numbers. The single biggest contributor to the fall in overall Australian earnings was News Corporation, which reported a loss of $1.04 billion for the December half--its second consecutive loss.
K R Murdoch: $14,406,844
K R Murdoch: $ 67,030,420
More CEO Salaries
AGL profits down 60.2%... G. Martin $821,447
Amcor profits up 19.6%... Russell Jones $4,545,001
Amrad Corporation Consecutive Loss ...Dr Sandra Webb $819,284
Brambles Industries profits down 10.3%...Sir C. K. Chow $2,225,000
Brickworks profits down 39.9%...Lindsay Partridge $385,000
Caltex Loss to loss... Tony Blevins $675,528
Coles Myer up 8.2% from loss...John Fletcher $4,585,000
David Jones profits down 10.8%...Peter Wilkinson $1,305,001
Hutchinson Telecomm loss to loss...Barry Roberts-Thomson $710,023
Jupiters profits down 14.7%...Rob Hines $2,865,000
Magellan Petroleum consecutive loss...J. Kelly $365,000
Newcrest Mining profits down 38%...Tony Palmer $1,030,500
Novogen loss to loss... Christopher Naughton $375,000
Nufarm Profit to loss...Doug Rathbone $2,634,995
Orica profit to loss...Malcolm Broomhead $2,985,000
Publishing & Broadcasting profits up 17%...Peter Yates $5,275,000
Timbercorp profits down 90.8%...Robert Hance $275,000
Sources: Bosswatch database, BRW, Miriam Cirsic, The Australian, Business Sunday, Company Reports and http://www.asx.com.au
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