blue_chameleon
Shake the sauce bottle yo
- Joined
- Mar 7, 2003
- Messages
- 3,078
- Gender
- Male
- HSC
- 2003
I wholeheartedly agree with the fundamentals of your position.Let's take Pacific Brands as an example. There is public outrage over it's former CEO receiving a multi-million dollar payout while many thousands of workers have simultaneously been laid-off. Likewise, its current CEO has also come under attack for her salary arrangements.
Their role as CEO of the company is not to protect employees' jobs, they are agents of the company's shareholders and their prime function should be to increase shareholder wealth.
If this means slashing jobs here and sending them overseas, so be it. And if that results in increased shareholder wealth, then that decision should be duly rewarded.
I support increased shareholder involvement with regards to executive salaries/payouts, but in keeping with my belief of minimalist government, I do not support any legislation specifically restricting executive payouts. I don't think it is the government's place to do that, such decisions should be left to the shareholders. It'll be interesting to see the fineprint of this legislation and exactly how restrictive it is.
Anyway, as Graney said, it's just a populist move.
Normally, I would support the market taking care of the issue and fiercely disagree with anyone who tried to sell me the merits of government intervention into the markets.
However, with recent events both here and abroad, ethics seemed to have unwillingly kicked in. For me, this isn't an issue of retaining executives payouts 'because government knows best'. Its about the fundamentally flawed basis for which executives are receiving a lot of these massive payouts.
I used the example of John Mulchany and his time at Suncorp. He left the company in a disgraceful position, wiping billions off it's market capitalisation and crashing it's share price. Yet, above and beyond his salaried remuneration for his services, he gets $20m for his efforts. All I ask is, on what basis? Why?
It's not a case of me adopting the 'it's the end of capitalism' premise, but rather me taking this on face value of what should be rewarded and what shouldn't. Fundamentally, I can't see why some executives of failed companies have been rewarded, and this appears to me that the market (stakeholders/shareholders etc) can't fix the issue.
I'm also supporting this legislation on the basis that it doesn't interfere with 'in service/contracted' remuneration to executives.