People oppose corporate CEO pay surge

August 3, 2018

Corporate CEO salaries have hit record high levels over the past year, according to the latest CEO pay report from the Australian Council of Superannuation Investors (ACSI). The report shows that pay for company bosses has reached its highest level for 17 years thanks to "persistent and increasing bonus payments".

ACSI chief executive Louise Davidson told ABC radio on July 17 the results showed CEOs and company boards were "out of touch with community standards", especially given the federal government's concerted campaign for corporate tax cuts.

"At a time when public trust in business is at a low ebb and wages growth is weak, board decisions to pay large bonuses just for hitting budget targets rather than exceptional performance are especially tone deaf," she said.

The survey said median pay for ASX 100 chief executives rose 12.4% to $4.36 million, and rocketed by 22.1% to $1.76 million for ASX 101–200 company bosses. Bonus payments rose more than 18%, with close to one in three ASX 100 CEOs awarded at least 80% of their maximum bonuses

The top three ASX 200 earners in the 2017 financial year include Domino's Pizza Enterprises chief executive Don Meij at $36.8 million, Peter and Steven Lowy of Westfield at $25.9 million and Macquarie Group CEO Nicholas Moore at $25.2 million.

In the US, Bloomberg Billionaires Index announced on July 16 that Amazon head Jeff Bezos has amassed a personal fortune of more than US$150 billion. He is now the richest plutocrat in modern history.

Socialist Senator Bernie Sanders invited the CEOs of Amazon, Walmart, McDonald's and Disney to meet their employees for a live-streamed discussion, saying: "I really hope [the CEOs] have the guts to sit on a panel with their own employees and explain why it's acceptable that they receive huge compensation packages while their very own workers are struggling to put food on the table."

Of course, none of the CEOs showed up.

In Australia, these huge hand-outs to CEOs occur while:

  • the crimes and injustices of the big banks are being exposed in the banking royal commission;
  • wage growth for ordinary workers has hit record lows;
  • penalty rates are being cut;
  • wage-theft by companies is rampant; and
  • the retailers association wants to freeze the minimum wage.

On the other side of the ledger, a recent poll conducted by The Australia Institute (TAI) showed 80% of the public believe the nation's chief executives are paid too much and 75% say strict limits should be placed on CEO pay. Almost 80% supported making companies pay tax on very large payments, such as bonuses, to executive staff. A similar number of respondents supported a new higher rate of income tax for individuals with very large pay packets.

TAI deputy director Ebony Bennett said most people nominated $720,000 a year or less as a reasonable salary for a CEO. "It is clear the reality of what CEOs are paid is not in line with community expectations," Bennett told SBS News, in a notable understatement, on July 1.

No wonder Prime Minister Malcolm Turnbull is finding so much public opposition to his signature policy of giving huge tax cuts to the big corporations.

Now is the time to launch a major labour movement and community campaign to make the major corporations and their executives pay their full share of tax.

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