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Issue No. 179 23 May 2003  
E D I T O R I A L

The Game’s Up
Research into executive pay commissioned by the NSW Labor Council makes explicit what most of us have suspected for some time: the multi-million packages are a rolled gold rort.

F E A T U R E S

Interview: Staying Alive
CPSU national secretary Adrian O'Connell talks about the fight to keep the public service - and the union movement - alive.

Bad Boss: The Ultimate Piss Off
Wollongong workers on poverty-level wages are losing up to $5000 for taking toilet breaks, according to the union representing staff at a Stellar call centre.

Industrial: Last Drinks
Jim Marr looks at the human cost of the decision to close Sydney’s Carlton United Brewery

National Focus: Around the States
If Tampa told us that John Howard circa 2003 is the same spotted rabid dog from 1987, this week’s assault on Medicare confirms it reports Noel Hester in this national round up.

Politics: Radical Surgery
Workers are vitally interested in Medicare, not least because they traded away wage rises to get it. Now, Jim Marr writes, the Coalition Government is tearing apart the 20-year-old social contract on which it was founded.

Education: The Price of Missing Out
University students and their families will pay more for their education following the May Budget, writes Tony Brown.

Legal: If At First You Don't Succeed
Love is wonderful the second time around, goes the famous torch song. But is the same true for legislation? Asks Ashley Crossland

History: Massive Attack
Labour historian Dr Lucy Taksa remembers the general strike of 1917 to put the recent anti-war marches into perspective

Culture: What's Right
Neale Towart looks at a new book that looks at the failings of the Left, while reasserting the liberal project

Review: If He Should Fall
Jim Marr caught Irish folk-rock-punk legend Shane MacGowan at Sydney’s Metro Theatre. He was surprised but not disappointed.

Poetry: If I Were a Rich Man
Through a distortion in the time-space continuum, we have found a recording showing how people a few years into the future will deal with health care.

Satire: IMF Ensures Iraq Institutes Market Based Looting
The International Monetary Fund (IMF) has agreed to monitor the Iraqi economy to ensure that the reintroduction of looting into the economy conforms with free-market theory.

N E W S

 War Declared on Mega Salaries

 Poms Prick Golden Parachute

 Picket Breaks Abbott

 Abbott: Unions are Winning

 Hotel Silences Poverty Witness

 We’ve Lost A Lion

 Nurses Refuse to be Shelved

 Boss Picks Porters’ Pockets

 Left, Right Meet at Sea

 ACTU Prescribes Pan Medicine

 Tycoon Tuned Out

 MUA Clout in Wollongong Punch-Up

 Pusey Roams Dark Side

 Activists Notebook

C O L U M N S

The Soapbox
What May Day Means to Me
Reader Marlene McAlear penned this tribue to May Day and worker solidarity.

Solidarity
The Toast
Labor Council secretary John Robertson's toast to the annual May Day dinner in Sydney.

The Locker Room
The Numbers Game
In life there is lies, damned lies and sporting statistics, says Phil Doyle - but who’s counting.

Postcard
Brukman Evicted
ZNet's Marie Trigona reports from the streets of Argentina in the rundown to last week's presidential election.

Bosswatch
The Costs of Excess
Some tall business poppies had their heads lopped this week as the laws of economic gravity applied their always chaotic theory.

L E T T E R S
 Hard Copy
 Bad Language
 Modern Management Theory
 Tom's Revival
 Off the Rails
WHAT YOU CAN DO
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Editorial

The Game’s Up


Research into executive pay commissioned by the NSW Labor Council makes explicit what most of us have suspected for some time: the multi-million packages are a rolled gold rort.

Our team of respected academics have crunched the numbers and come to the dramatic conclusion that the more you pay a CEO the worse their company performs - and vice versa.

These are not a bunch of sociologists applying some whacko economic theory, it is a sober analysis of share return, dividends and long-term viability.

You don't see academics animated too often, but when they came into Labor Council to brief us on the results a few months ago it was as if they had discovered the equivalent of accounting gold.

For those who have argued that you need to pay astronomical salaries and throw in Lotto-style options packages, we can now confidently say that their emperor has no clothes.

Once a CEO's salary exceeds the average weekly wage by a factor of 20, there is a demonstrable deterioration in company performance.

What this means for unions is that the debate about executive pay now transcends a moral argument about corporate excess and becomes a very real issue of job security.

If an executive takes home a salary that is outside the 1:20 matrix there is a real chance the company is in big trouble.

The union movement's challenge is to use this information strategically: industrially, politically and financially.

Industrially, workers should be questioning the distribution of profits armed with research showing that the money should not end up in the hands of the boss.

Politically, unions need to push governments to make decision about corporate pay more transparent and accountable. The current situation, where it is governed by the Australian Stock Exchange, itself a listed corporation, is an untenable conflict of interest

We also need to convince Labor Government to use purchasing policy to force forms to moderate executive pay; as Tony Abbott uses government funds to promote AWAs, Labor must use its financial levers to promote corporate responsibility.

And financially, we must wake the sleeping giant that is the union movement's influence in superannuation - taking the next step in protecting our members long term interest through our stewardship of industry super funds.

Unions can not sit back and allow a financial orthodoxy that is now exposed as bogus force them to raise their hands when the corporate cabal demands a pay rise.

As researcher John Shields pointed out this week, the idea that there is a market for talented CEOs, is a myth that has been perpetuated by the corporate sector. Like all else, this market is constructed.

But that's political theory; the message from this research is that when you look at the numbers the claims for high CEO pay do not add up. The message for the Top End of Town is that the game's up.

Peter Lewis

Editor


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