Small shareholders and industry super funds are in revolt against the remuneration packages for CEOs at giant corporations such as Telstra and Tabcorp, renewing debate over excessive bosses’ pay at a time when workers’ wages remain stagnant.
The average pay of an ASX100 CEO is currently $4.36 million — about 52 times the average wage ($82,436 a year), according to figures from the Australian Council for Superannuation Investors (ACSI).
While this gap is lower than the monstrous 300 times average pay discrepancy in the United States and 180 times in Britain, the obscene level of executive pay is causing huge discontent.
Even Telstra chairperson John Mullen was driven to remark that executive pay was “too high across the board”, and former Business Council of Australia president Tony Shepherd commented: “CEO salaries and executive salaries, particularly in the larger companies, have got out of whack with the responsibilities and contribution they are making.”
Discontent boiled over at the recent Telstra AGM, with 62% of shareholders voting to reject proposed executive bonus payments. The following day, 40% of Tabcorp investors voted against the company's executive pay plan.
It’s worth noting both companies were previously government-owned entities.
These votes are well above the 25% level required for a so-called “first strike” to reject an executive remuneration package. Under the current system, if a “second strike” vote against executive pay occurs at the following AGM, a vote to generate a spill of the board is automatically triggered.
Executive pay rises have shot through the roof since the neoliberal offensive against workers began in the 1980s. A 2009 report by the Productivity Commission revealed that executive pay for ASX100 companies rose from 17 times the average earnings in 1993 to 42 times in 2009.
The small shareholder revolt over CEO pay is just a tiny reflection of growing public anger at the crimes and misdemeanours of giant corporations — which were further exposed by the banking royal commission.
Behind this inequality and “culture of greed” engendered by the Big Four banks and other tax-dodging multinational corporations lies a fundamental problem: the private ownership and control of industry and the financial system.
The Labor opposition has committed to forcing companies to publicly report a ratio of CEO-to-employee pay if it wins the next federal election. Shepherd has warned that “well, that's just a form of communism.”
Of course, this is as far from the truth as former PM John Howard’s claim that a royal commission into the banks was “rank socialism”.
What the labour movement really needs to campaign for is genuine democratic control over industry management, with boards of major industries elected by workers and the community. We need to open the books of these giant corporations, so that the public can see what dirty deals are being done behind our backs.
This process of developing community control over big corporations could be a stepping stone to the nationalisation of strategic sectors of the economy, thereby ensuring that the wealth of society is in the hands of the people, not the super-rich 1%.
These are the kinds of demands Green Left Weekly campaigns for every week. We do our best to get the truth about inequality and peoples’ struggles for justice out to the widest possible audience.
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