Executive Pay: Overview : SBS Insight

Overview

Are executive salaries justifiable?

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A top executive in Australia can earn over $30 million whereas in the US it can be as high as $180 million. Business leaders argue that to attract international talent to Australia we have to pay top dollars to make us globally competitive.

But can anyone’s job be worth that much? What results should an executive bring to a company to justify these salaries? Are Australian shareholders getting value for money?

Join us as we bring together the major players in this debate - business leaders, board members, shareholders and Nick Sherry, Minister for Superannuation and Corporate Law, who recently launched an enquiry into this issue.

Some of our guests will be available for you to talk to after the show on our Live Chat.

Further reading

The Australian Productivity Commission has just released an issues paper into Regulation of Director and Executive Remuneration in Australia. To read the full paper - click here

Meet the Guests

Charles Macek

Charles Macek is a Telstra director and chairs the remuneration committee that approved Sol Trujillo's pay. Charles defends the controversial packages, and says that to attract the best CEOs in the world you have to offer competitive salaries. Charles has been a director of Wesfarmers and Telstra since 2001.

Nick Sherry

Nick Sherry is the Minister for Corporate Law and Superannuation, and recently announced a Federal Government review of executive pay. The Productivity Commission will investigate ways the government can intervene. However, the Minister immediately granted shareholders the right to vote on termination payouts.

Yasmin Allen

Yasmin Allen is a non-executive director of Insurance Australia Group Limited (IAG), where she is chair of the Audit & Risk Committee and a member of its Nomination & Remuneration committee. Yasmin also serves on the board of Macquarie Specialised Asset Management, and is chair of its Audit committee. Yasmin has more than a decade's experience as a board member. She previously worked in investment banking, specialising in strategic analysis and corporate advice, in Australia and overseas.

Harold Mitchell

Harold Mitchell opened Mitchell & Partners in 1976 and remains executive chair. The media buying agency has an annual turnover of $1.3 billion and profit of about $34 million. Harold boasts of taking no salary since he turned the company public, and pays his CEO son ‘half of what equivalent CEOs earn’. Despite working five days a week Harold is clear he doesn't need a salary because he takes home a decent whack in dividends. He was awarded the Officer of the Order of Australia in 2004 for his services as an arts and cultural benefactor and fundraiser.

Dean Paatsch

Dean Paatsch at Riskmetrics has been monitoring executive pay for the top 100 companies in Australia since 2000, and says there are examples of CEOs being paid excessively. Riskmetrics are employed by institutional shareholders - such as super funds - to monitor and recommend how they should vote at shareholder meetings.