Alan Kohler is one of Australia’s most experienced commentators and journalists. Alan is the founder of Eureka Report, Australia’s most successful investment newsletter, and Business Spectator, a 24-hour free business news and commentary website. He also hosts Inside Business, a half-hour Sunday programme on the ABC, is the finance presenter on the ABC News - and producer of the nightly graph (or two).
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Comments on this article
Comments PolicyAgreed, agreed, agreed. Like, like, like ('Two strikes' falls foul, November 27).
Company remuneration reports are nothing more than a device used by the boards and senior management of public companies to justify to shareholders (the owners of the business) the disgraceful over payments that are made to their senior executives for less than satisfactory results. The reports are designed to be as complicated and as obscure as possible as they attempt to confuse and intimidate the shareholders into believing that there is some justifiable and explainable basis for the remuneration paid to the senior officeholders. It is usually difficult or impossible to decide upon the merit or relevance of what is proposed.
Base remuneration at reasonable levels together with easily understood and relevant and measurable targets for real results are OK. The current corporate remuneration arrangements are but a sham and all thinking shareholders know it.
Now is the time for all other large corporate shareholders of public companies to come out of the shadows and be counted. I encourage all small shareholders who feel strongly on this issue and unable to change the situation to have the courage to continue to vote against excessive and obscure remuneration packages ('Two strikes' falls foul, November 27).
So how is it not working?
The majority over rules the minority. Wow that sounds like democracy to me.
Minority can vote with their feet too.
Too bad it doesn't happen elsewhere where minorities are pushing governments all over the world into knee jerk reactions. ('Two strikes' falls foul, November 27).
The new legislation should have been designed with more thought. Clearly company executives were always going to find a way around and the contempt which many have for the owners of companies (ordinary shareholders) is obvious. And then the is the fact that pay rises are frequently upheld by institutional shareholders whose CEOs are lining up for the flow on to them. So why stop the feeding frenzy in the trough of shareholders' money.
If the government is serious then it needs to introduce GENUINE reforms. The current lot is more of a Clayton's reform which is waiting to be manipulated. it will be ('Two strikes' falls foul, November 27).
Yes, most listed company senior management are grossly overpaid ('Two strikes' falls foul, November 27).
The cartel like system whereby a separate committee of the board, often advised by an 'independent' remuneration consultant, sets the remuneration policies of management is little more than a joke. The members of the board committee are generally members of the same cartel as management. The remuneration consultant generally assesses what other overpaid management elsewhere is being paid and advises accordingly. The overpayments are therefore self perpetuating. So how best to break the cartel?
Rambotrader (November 27, 12:01 PM) is right, institutional shareholders are the problem as they also are generally members of the same overpayment cartel.
Somehow, we need to get in place a system whereby the real interests of the underlying superfund (and other institutions) beneficiaries are properly represented by institutional management. Until that happens we will not see real change.
the two strikes will never work satisfactory on directors of public companies , what is needed is proper legislation so the share holders can vote at the agm on remuneration for the board.
It has gone too far now with all these so called STE and LTE.incentives completely out of control, it appears we nearly have to beg the CEO to do some work by all these rediculous incentives .
lets pay the CEO a salary set by the shareholders .
after all he is an employee of the company not an owner outright.
It is about time to get change the way wew do things as it is not working at all .
the directors are in the strongest union in australia they make the wharfies look like kindergarten and look what john howard did to them in the nineties.
we must buckle down on these directors excesses and they must be fairminded in their approach to remuneration.
we cannot and willnot anymore reward for failure.
wake up australian shareholders ('Two strikes' falls foul, November 27).
All the comments (5 ) so far echo anything i could say. I feel that the government clones are bound by big business,and when they are retired they will then be on the boards of companies once again dipping in to the enormous pot of money supplied by the investors.That is the reason why governments,or should one say politicians of all parties don't stop the plundering of peoples money. They want to keep on pillaging and get rich in the process.(Two strikes' falls foul, November 27).
I've always thought it was a bit erroneous that just because I'm not happy with my employee's remuneration, I have to make a definitive decision to either sack them or retain (presumably on the 'sackable' salary) him/her ('Two strikes' falls foul, November 27).
Why can't I simply say "I like the job you're doing but I'm only prepared to pay you 'X' amount" The employee can then decide if they are happy to stay for that salary or not.