Powered by MOMENTUM MEDIA
subscribe to our newsletter
‘Excessive’ banker salaries under scrutiny

‘Excessive’ banker salaries under scrutiny

Progressive think tank The Australia Institute has argued that the disparity between bank CEO pay and average weekly earnings is contributing to the uncompetitive nature of Australia’s economy.

The GFC+10: Executive Pay in Australia report released yesterday by The Australia Institute has scrutinised the pay packages of executives at Australia’s biggest companies 10 years on from the global financial crisis.

Homing in on banks, which had “been a particular focus of attention” in recent times, the report found that NAB and Commonwealth Bank of Australia bosses respectively earned 108 and 93 times the average weekly earnings in 2017.

Advertisement
Advertisement

“Pay for the NAB CEO peaked in 2004, but even if we ignore that spike, the data still show[s] that CEO pay was increasing rapidly during the bulk of the 2000s, as people were expressing the most concern.”

For the chief executive of CBA at the time, the spike in pay was widest in the lead up to the global financial crisis.

In fact, seven- or eight-figure remuneration packages were “likely to have played an important role in the global financial crisis” wherein chief executives risked long-term performance for short-term gains, the report said.

Such a significant gap in the earnings of average workers compared with top executives also reflected “to a large extent the uncompetitive nature of the modern Australian economy”.

“It has to be stressed that the issue of massive CEO pay is one associated with industry concentration and the dominance of big business in the Australian economy,” the report said.

“According to tax office data, 390,774 companies reported a positive income and declared taxable income of $281 billion, giving the ‘average’ company an income of $719,201 in 2015.

“An economy dominated by ‘average’ companies could never pay CEOs anything like the amounts going to the CEOs of the top Australian oligopolies and monopolies.”

While “growth in CEO pay was quite dramatic in the lead up to around 2007 or 2008” and had moderated since then, the report concluded that remuneration for these top executives “remains excessive”.

‘Excessive’ banker salaries under scrutiny
mortgagebusiness

 

Latest News

ASIC is determined to flex its muscles, with a bill designed to enhance its enforcement powers one step closer to law.  ...

Treasurer Josh Frydenberg has told the banks and regulators that they will face an inquiry down the track to ensure they have lifted their g...

A CEO has welcomed the introduction of legislation that would “remove a handbrake” that has held back customer-owned banks from competin...

FROM THE WEB

POST RC PANEL DISCUSSION ADDED

podcast

LATEST PODCAST: The current mindset of the mortgage industry

Is enough being done to ensure responsible lending?