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CEOs arent that special

Posted by: Michael Smith | 13 October, 2008 - 1:09 PM

Greed was written all over the face of Richard Fuld the CEO of failed investment bank Lehman Brothers during his appearance before the congressional hearing last week. He's earned more than $500 million while at the helm of the company. And it's crashed to earth with a thud. Shareholders get next to nothing - Richard Fuld keeps his money.

Qantas CEO Geoff Dixon earned $12 M last year - that's $230,000 per week. Engineers in Qantas earn around $50,000 - so in one week, he earns the same as an engineer earns in 4 years.

Telstra CEO Sol Trujillo will this year earn around $20 million. That's 570 times the salary of a $35,000 call centre worker. 400 times the salary of a $50,000 a year technician. The technician would have to work 400 years to earn what Sol earns in one.

In 2007 more than 66% of Telstra shareholders voted against Sol's pay. That didn't matter. The board - of which Sol Trujillo is a member - approved it anyway. Since his appointment in 2005

Annual profit has slumped from $4.4 bn in 2005 to $3.3 bin in 2007 Earnings per share from 35c to 26c in the same period Share price $5.02 when he arrived, $4.09 this morning Telstra's expenses, however, headed north - $11.8 bn to $14 billion as has pay for executives.

Watching your super fund go down? It's your super that's paying for these CEO - your super fund most likely owns shares in these companies.

Last week, during the global financial turmoil, the Chairman of United Group Trevor Rowe defended a 30% leap in pay for CEO Richard Leupen to $5.6 million - despite more than 37.5% of shareholders voting against it. Trevor Rowe is also the chairman of BrisConnections, the company building the airport link tunnel whose shares were listed at $1 a couple of months ago and have since dropped more than 90% in value.

When did we become this sort of a country? In the early 90s CEO pay was around 20 times the average wage. Average CEO pay is now more than 200 times the average wage. It's a disgrace.

CEOs aren't that special. It's time shareholders were listened to.

Blog comments

I agree that CEO's are paid far too much for what they do - especially when profitability/share value drops, dramatically in some cases!!

What can we do to stop the greed. The Board of Directors are all their mates, and shareholders have little say because it's all controlled by the big shareholders, which once again are their mates.

It's pure greed and I think the Government has to somehow act to stop it - can we legislate against this greed?

Put them on Ã¢Â€ÂœrealÃ¢Â€Â performance bonusÃ¢Â€Â™s Ã¢Â€Â“ base pay of $1m, then bonusÃ¢Â€Â™s based on profitability Ã¢Â€Â“ after EVERYTHING is taken into consideration.

Graham Howlett Thursday 22 January, 2009 - 10:38 AM
I agree that CEO's are paid far too much for what they do - especially when profitability/share value drops, dramatically in some cases!!

What can we do to stop the greed. The Board of Directors are all their mates, and shareholders have little say because it's all controlled by the big shareholders, which once again are their mates.

It's pure greed and I think the Government has to somehow act to stop it - can we legislate against this greed?

Put them on Ã¢Â€ÂœrealÃ¢Â€Â performance bonusÃ¢Â€Â™s Ã¢Â€Â“ base pay of $1m, then bonusÃ¢Â€Â™s based on profitability Ã¢Â€Â“ after EVERYTHING is taken into consideration.

Graham Howlett Thursday 16 October, 2008 - 10:45 AM
Not only do some CEO's get big payout such as Alan Moss, highest paid executive with remuneration totalling $33.49 million in 2007 (http://en.wikipedia.org/wiki/Allan_Moss) but they also show immense faith in the operations they build.

FORMER MacBank chief Allan Moss has largely escaped this week's meltdown in the group's shares, having sold the bulk of his holding.

http://www.theaustralian.news.com.au/story/0,25197,24369647-36418,00.html

Mandy Monday 13 October, 2008 - 5:08 PM
It's an absolute disgrace but as was demonstrated with Richard Fuld's attitude, many many CEO's the world over couldn't give a rats what the ordinary shareholder thinks or does. CEO's, their cronies and "board mates" believe that they are sacrosanct and can do no wrong.

Philip Monday 13 October, 2008 - 2:57 PM
GEOs THIS IS A BIG BOYS CLUB AND THE SHAREHOLDERS MUST START TAKING ACTION AS THE MONEY IS PART OF THEIR PROFITS OF A COMPANY eg AMP 6 OR 7 YEARS AGO

DAVID G SMYTHE Monday 13 October, 2008 - 1:39 PM