Two points
1). As HR people are fond to tell those further down the rung, it's not just about the pay. Living and working in Australia offers more then monetary rewards. We should be focussed on improving CEO work life balance.
2). Have we got a skills shortage in the CEO area?

Remembering that the role of a modern CEO is find the best way possible give customers the very least possible at the highest possible cost to the customer then many CEO do a great job. It is all about money, not service.

In this role Telstra Ziggy has done a great job. The Telco's have invented a great system that is being taken up by many other industries.

Price fixing is illegal. But it is not illegal to design products amongst yourselves that make it impossible for customers to compare the cost of one product over another. No competition exists because each maximises profit in a way that cannot be competitively evaluated against a similar product.

Yes, Ziggy and the others have done a magnificent job for the share holders.
The way to limit CEO salaries is to regulate industries in a way that force them to be competitive and make full disclosures. Ziggy and the others are only the product of a sick system that has now came back to bite everyone.

Isnt the issue that the CEO's have been paid far too much for doing so little, because the performance measures were trite and inadequate.

Of course who developed the KPI's in the first place but the management of the enterprise.No surprises there.

An it may not necessarily improve with the share holders having more to say either.

As a case in point the AIG in USA is under the pump because they are using the Govt rescue funds to pay bonuses. When the bosses were queried by the Obama administration they responded by saying that the legal advice that they have, is that there are contracturual obligations between the company and the empoyees to the pay the bonuses, no matter what.

Given that the AIG made $100bn losses over the last few quarters one wanders what sort of bonus contract was constructed that enabled payouts to be made even if what the employees had done, bankrupted the entity.

Only the Americans would be so incompetent and stupid.

Unfortunately like the subprime risk, which they passed down the line and poisoned the world's banking systems, it is the rest of us that have to pay for their idiotic and uncommercial behaviour.

Do we have a shortage of skilled people to step into senior roles?
No way! We have a glut being held back by the "grey ceiling".
CEOs and boards effectively form a cartel in australia. It has nothing to do with quality...the Mafia bosses get paid heaps too but this doesn't necessarily mean it is good for anyone else. Current CEOs are more akin to Mafia than NASA as their "business" skills are all around confidence and people manipulation.
If you think that $5M salaries are good at *any* level of the economy then please prove it with hard facts.
From what I've seen for the numbers, and in my own workplace, that over paying people attracts the "seagull" managers and psychopaths.
The good people will gravitate to the jobs they love and excel at: Greedy folk have caused this mess by forgetting that the business speak has implications in the real world: "leverage" is just "debt". "offshoring" is often "asset stripping", and the good old "profit drive" really means "regressive: more to the rich".
It is time for new rules for execs and boards: Not for commie reasons, but to de-fluke the capitalist system from the excess of parasites inflicted upon it's lifeblood: Companies.

It could well be argued that importing CEO's from overseas on high salaries is a sure recipe for disaster. These people are the ones who have gotten the world into its current financial trouble and we had better do without them. We need more people like Gerry Harvey who is quite content to take home a modest salary while he operates his company in a more prudent fashion. We can do without the high flying risk takers whose only thought is what they can take back to America when they retire early.

If the cap proposal is creeping socialism, can somebody please think of something we can give to scoialism so it can get up on its feet and start running.

A pretty feeble attempt to defend the well night indefensible.
A bit of very grudging admission that there might perhaps be a tiny issue, a bit of silly rhetoric about 'creeping socialism' (obviously something that is OK when it comes to paying the workers, though), and the usual CEO club's stale 'pay peanuts and you'll get monkeys' line, the last of which is always trotted out as if it conveyed some profound, universal and debate-closing truth. The stuff about 'remuneration packages' - always a 'package' isn't it; they love euphemisms for 'pay' - being 'internationally competitive' is the classic example of begging the question! Worldwide, boards and CEOs comprise a club in which the members pay themselves whatever they can get away with. 'Internationally competitive' completely ignores the question of whether CEOs anywhere should be receiving so much money.

What's the correlation between financial success of a particular corporation and the salary levels of its senior managers? Not very strong I suspect. Japanese corporations achieved very high growth rates for decades with relatively low ratios between the highest and lowest paid employees in their companies, for some reason,we in the West, find it necessary to pay our "captains" of industry huge salaries because the "market" requires it. We value paper entrepreneurs above engineers and scientists and pay the price in unsustainable "profits" which often disappear sooner or later. Any arrangements that enable shareholders to approve and scrutinize senior managers' salaries is an improvement.

No you are all wrong. The author is on the money here.

I think these CEOs should also give back any government subsidies, corporate welfare payments or bailout money we wouldn't want them to be accused of feeding the evil socialist machine either.

Snigger...

oh god, not the creeping socialist again, its clammy fingers on my leg, my heart, my brain...telling me to object to greed, to value community more than profit...away damnable perfidy! Go back to Bolivia and leave us to do honourable battle...you know,the thrust and parry of Illustrious Capitalism and all that...Pity we're still carrying sticks (and forget about the CEOs - if we're going to have socialism let's leap over the bodies of the obscene executive and go for the full body corporate, its bloated excrescence surely more deserving than a few symbolic elite). I suspect that the entire point of the focus on executives is so that we don't pay attention to the real problem - the age of corporate governance in which corporations are larger than countries - and act just as western countries did for decades as they exploited the resources of others.

>> the more naturally attuned market forces

god. people still toss off cheap nonsense like this as if it means something?

Warren Buffet takes home an annual salary of about $US100,000 for running Berkshire Hathaway. On that scale, I'd say Sol Trujillo and his amigos are worth about $A10,000. Per decade. Shared between them. And that would be including bonuses and lunch money.

Unfortunate that the author couldn't resist jumping on the old carousel and riding the old pony:

"There is arguably a creeping socialism in motion by proposing to place a cap on CEO salaries, and does it risk setting a future precedent targeting other salary earners, or even the maximum assets any one individual can own? The Australian Government therefore needs to be heedful in not rewinding the clock to pre-deregulation days and risk becoming an increasingly regulated “sickle and hammer” state."

A "creeping socialism" in motion? Is that like one of those Portuguese centipedes, searching for sex on the night-lit walls of Tasmanian homes?

Fortunately the author otherwise rises slightly above "creeping stupidity and "creeping credulousness", which can lead to an increasingly blinkered and feedbagged state of mind.

I wish I could say as much for bigmal, who evidently has convinced himself that, regarding ill-timed executive bonuses,

"Only the Americans would be so incompetent and stupid."

Myself, I expect it is not so much a matter of nationality as of policy and legal framework. Bigmal, wherever you live, you had better look closer to home. Watch Out! Stupidity and incompetence could be creeping, from nearby government and corporate offices, toward you. In fact, they may already have arrived, just like the Pod People.

A cap on SERF wages - creeping capitlism?

"Portuguese centipedes", "sex" and "the night-lit walls of Tasmanian homes?"

Now there's a group of words I never expected to see in the same sentence.

On topic:

As there are already caps on the wages on below exec-level workers, why is the suggestion of putting a cap on executive staff considered to be socialism of any speed?

I owe an apology to all about this Portuguese centipede business. It should have been millipede, not centipede. But I strongly encourage you to read through the primary source, in its entirety, in the Hobart Mockery; substituting substituting as you go, the word "socialist" for the word millipede. And see if you don't agree that the subtly vilifying portayal is worthy of Ayn Rand (at her best).

http://www.themercury.com.au/article/2009/03/16/61491_tasmania-news.html

"Dim lights for sexy posts"
ANNE MATHER

March 16, 2009 04:00am

THESE invaders are drawn by bright lights and sex.

Portuguese millipedes are on the march in huge numbers, invading homes around Tasmania. Experts say autumn is the breeding season and they are searching of a mate. They also have a penchant for light.

Pest controllers have noted a recent increase in people wanting to know about how to deal with the black invaders, but there are natural ways of dealing with them.

"Draw the curtains and use draught stoppers," said entomologist Cathy Young, senior curator of zoology at the Tasmanian Museum and Art Gallery."

and so on

Sir Vivor

My criticism of the bonuses is not so much as to their bad timing but the way they were contracted without being linked to KPI;s.

In short they were not bonuses at all but deferred salaries.

All of this done whilst the share holders were kept in the dark

If only Darwins Law worked in situations like this.

bigmal,

The law that applies here is,"survival of the fattest".Many corporate executives are essentially rentiers who use their positions to divert real profits from the shareholders or to produce illusory "profit" which rapidly evaporates.

Bigmal,

re:
"My criticism of the bonuses is not so much as to their bad timing but the way they were contracted without being linked to KPI's."

Thank you for the clarification.

My guess is that cases of loose linkage to Key Performance Indicators may be found within a variety of different organisations, economies and types thereof, globally.

As Forrest Gump said in the movie, stupid is as stupid does.
Cheers

1. FYI: http://business.smh.com.au/business/swan-to-curb-obscene-salaries-20090318-91lr.html

2. High bonuses for non-performers and parties "leaving" the sinking ship are neither Capitalism or Socialism, rather opportunistic managerialism. Besides, in the twenty-first century as Drucker alludes its the techos that make the money.

3. Herein, many a systems manager could take on the running a company with fair less trauma than your average senior manager trying to write a sophisticated (inner shell) computer programme. It would be easier to assess a few briefing papers and understand balance sheet ratios, than to programme in FORTRAN or JCL. I have done both and there is no comparison, with regards difficulty