Top executives to snub PM's appeal

Lamp, The, April, 2008

Australia's highest paid executives are certain to ignore Prime Minister Kevin Rudd's appeal for them to exercise 'wage restraint' in the coming year.

Business organisations such as the Australian Chamber of Commerce and Industry and individual corporations said executive salaries were a matter for company boards alone and were linked to 'performance'.

Peter Salt, a director of Salt and Shein, a firm specialising in executive recruitment, described the PM's appeal for restraint on executive salaries as 'naive'.

Executive salaries have gone through the roof in recent years. In 1992 the remuneration of the typical executive in Australia's top 50 companies was 27 times the average wage. By 2002 it was 98 times.

The top 10 highly paid chief executives of Australia's biggest companies, including Macquarie Bank, Telstra and Qantas, took home a staggering $125 million last year.

Their pay packets will likely swell by more than 20% this year, according to executive remuneration specialists.

A spokesman for BHP Billiton described as 'a fair representation of his enormous responsibilities' the $8 million salary its chief executive Marius Kloppers will receive this year.

Kloppers might consider himself short-changed in comparison with Telstra boss Sol Trujillo, who was paid almost $12 million last year--against the wishes of his shareholders.

Shareholders at Telstra's annual general meeting last November were ignored despite casting an overwhelming 66% of votes against an executive remuneration package.

The Federal Government-controlled Future Fund, which has about 16.05% of Telstra stock, voted against the package but the vote was 'non-binding' and ignored.

The Australian Shareholders Association has called for an overhaul of CEO salaries, saying bosses on so-called performance-based contracts were laughing all the way to the bank.