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Year End 2002 | |
Interview: Taking Stock Bad Boss: Pushing the Envelope Unions: The Year That Was Republic: Still Fighting International: Global Ties, Global Binds Politics: Turning Green Technology: Unions Online 2002 Industrial: The Past Is Before Us Economics: Market Insecurity Review: Shooting for Sanity Poetry: The PM's Christmas Message Culture: Zanger's Sounds of Summer
The Soapbox The Locker Room Bosswatch Predictions
Terror Australis
Abbott Gears For Grocon Stoush Restaurateur Takes Knife to Wages Protection Legal Double Whammy to End Year We�re Dreaming of a Sweat-Free Christmas Abbott's Xmas Message: Go To Jail Woolies Discount Spirit of Christmas New Collapses Prove Entitlements Farce UN Migrant Worker Charter Welcomed
Representative Representatives Men Only? Dry Argument Vale: Phil Berrigan
Labor Council of NSW |
Bosswatch Footloose Capital
Small Change If one stat sums up capitalism in the naughties it's this: the average CEO in the USA now earning a whopping 450 times the average salary of a worker. That's up tenfold from 1973, when the average CEO earned 45 times more than the average worker. Because the trade in CEO's is a little like the trade in basketball players, Australia's pays a little less for a little less quality, but still forks out mind-numbing sums for those at the helm of companies. As Bosswatch reported this year, 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. What to be done? Well, Labor Council is taking the first step in commission research into executive pay levels with a view to developing policies that limit the disparity between employees and boss. Results are expected in March - watch this space. For more details see the Bosswtach analysis at: http://www.bosswatch.labor.net.au/campaigns/general/1031717447_28193.php The Win-Win Option And then there are the executive option packages. It's a win-win deal: CDEOs are 'given' the option of butying stock at topday's rate some point in the future, then can cash that in against future increases in share prices. Apart form providing CEOs a financial inducement to maximize the share price in the short term (rather than run sustainable profits over the long term), the racket has now been found to be openly abused in Australian boardrooms. The Australian newspaper reported this year that executives have now taken any risk out of their option packages by locking in the value of their options without needing to inform shareholders. The value of options was placed in stark relief with a series of high-profile Golden Handshakes to departing CEOs. Suncorp Metway chief Steve Jones walked away with a secret options deal of $16 million. BHP-Billiton chief executive Paul Anderson 'earned' more than $18.2 million during his last year with the company. Meanwhile, David Murray cashed in 500,000 options art the cool return of $9.4 million - and he's not going anywhere.. While the big numbers sparked a lot of political chatter about the need to limit 'corporate greed', the Howard Government does not look likely to countenance anything beyond informing shareholders how big a hit they are taking. It was left to industry superannuation funds like C-Bus to draw a line in the sand, announcing it would vote against option packages in all companies it held a stake. Walls Fall Down With such generous recompense, one would think the corporate world was in safe hands. Alas, 2002 saw more corporate collapses, sparked by the fraudulent failures of US fly-by-nighters like Enron and Wolrd.com. In both these, and many other cases, dodgy accountancy practices were at the heart of the problems, with global bean-counter Arthur Andersens copping a bucketing for dancing both sides of the line as auditors and business consultants. In Australia, the greed and gullibility that is corporate politics was placed under the spotlight at the HIH Royal Commission. With a colourful cast including the giver to all and sundry Ray Williams, the sallow Rodney Adler and the boofy Brad Cooper, the only real argument was how the show stayed afloat for so long. Of all the stories outr favourite story is of Ray Williams's eating habits. No Maccas for this man. Among a few of Ray's more notable snacks were: $2018 at Forty One ($600 tip), Nautilus Restaurant at Port Douglas $2462.50 ($700 tip) and $2197.50 at Pier Restaurant (tip $700). I'd just love the opportunity to wait on him! Expect a report in the new Year. Expect to see some people go to jail. What About the Workers? If executive entitlements were stable, the same could not be said of the workers. A year of poli5tical debate about workers entitlements only served to prove the Howard Government's GEERS scheme was an absolute farce. Ansett workers are still waiting for justice, moved to serenade the PM with Christmas carols as another year passes by. Yet all travelers continue to pay the Ansett tax! By year's end, another collapse left 300 workers $5.5 million out of pocket when the Victorian firm Trollope, Silverwood and Beck closed its doors. As the federal ALP pointed out, three years after Howard coughed up for his brother Stan's firm, a coherent national approach is still a dream, with employers operating under the illusion the money is actually their's not the workers' A Little Good News One positive business story that stood out this year was South Africa's historic bid to redistribute wealth and justice.Australian miners active in South Africa claim they are relaxed about the country's new mining charter, which calls for black ownership of 26 per cent of the industry within 10 years. The biggest local investor in the South African industry, BHP Billiton, says that, in general, it supported the charter's broad objectives. Controversy has raged about the government's black economic empowerment (BEE) plans in the mining sector since the July leak of its ambitions on the issue. The initial push for 30 per cent of mining assets within black hands now replaced with 15 per cent in 5 years and 26 per cent in 10 years. The new charter also makes no call on new mining projects as against 50 per cent in black hands in the original. The transfer of equity in to black investors will also be at fair market value They're Psychos But the final word for 2002 goes to a team of psychologists probing the wave of corporate crime in America. They have noticed a trend that may not surprise many workers: the boss could well be a psychopath. Researchers say psychopaths and chief executives tend to share many personality traits - in particular an ability to appear plausible and attract followers while at the same time hiding low self-esteem. Robert Hare, of the University of British Columbia, one of the leading experts on psychopathic behaviour, thinks boardrooms are full of people who have what he calls "charisma without conscience". "If I couldn't study psychopaths in prison, I would go down to the stock exchange," he says. Amen.
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