Australia to outlaw excessive 'golden handshakes' (1 Viewer)

[blue_chameleon]

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.

I wholeheartedly agree with the fundamentals of your position.

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.

 

[Luke!]

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?

Well, TBH, I ask the same question. A number of firms have made questionable termination payouts, especially where those payouts were not legally or contractually owed. However, I still say this is a problem for shareholders to address, not the government.

 

[blue_chameleon]

Aside from moral outrage, what is the actual problem with paying executives large termination bonuses?

If it had a significant negative effect upon corporations, surely they just wouldn't do it?

It's more the basis on why they are being paid it. The amount is irrelevant.

Well, TBH, I ask the same question. A number of firms have made questionable termination payouts, especially where those payouts were not legally or contractually owed. However, I still say this is a problem for shareholders to address, not the government.

That's completely acceptable. Although, what changed my opinion from being 'let the shareholders deal with it' to 'this isn't working' was the fact that shareholders do have certain powers, but currently this system isn't working when it comes to debating with the Board of Directors on remuneration issues.

I'm not sure how the saga with Suncorp was dealt with regarding shareholder/board communication, but there were massive issues raised by Telstra shareholders at a past AGM in regards to the remuneration of Sol Trujillo. Shareholders tried to dispute the issue. They tried and failed. Plain and simply the shareholders just don't have enough clout. They are seen but not heard.

I agree with the fact that there will be loopholes that allow things to continue albeit in a more complex manner, but what alternatives are there for the shareholders that dispute the termination payments when the share price has crashed and burned and the CEO is rewarded with a few million for their efforts?

I guess maybe you need money invested in companies in these positions to better grasp the situation some shareholders face.

 

[blue_chameleon]

Shareholders should be free to pay their executives whatever they want. But if they fail, they should not expect government help. In fact they should never expect any government help in the first place.

This.

It did cost you a cent though. It's none of your business. Nor is it the business of anyone but the shareholders in that company.

I agree the shareholders sometime make poor decisions. Let them live with the consequences.

dOnT qUeStIoN aNyThInG, eVeR!!!1!!1!!

You assume I don't have any Suncorp shares?

 

[Nebuchanezzar]

Aside from moral outrage, what is the actual problem with paying executives large termination bonuses?

haha

aside from moral outrage, what IS the problem with murder?

Graney: evidence plz. So far your assertions are all "self-evident", but not so.

 

[Kwayera]

I don't have a problem with executimes being paid large termination bonuses if the shareholders approve of it. *shrug*

 

[Nebuchanezzar]

In the case of AIG (especially in the case of AIG), there are more stakeholders than only the shareholders, and I think the government is right to intervene by way of taxing them on money that wasn't theirs to begin with.

That was an aside to the main conversation.

 

[Nebuchanezzar]

and the deprivation of life is a moral issue, ya cunt
as is
copius amounts of wealth being allocated to a select few

(which results in the deprivation of wealth to the majority, a case in which they have no say)

 

[SashatheMan]

AFP: Australia to outlaw excessive 'golden handshakes'

Ridiculous populist move. The only effect this will have is to continue to drive talented executives overseas.

If talent translates to greed then yes it might.

Are you also crying a river for the AIG executives who might have to return the 165M in bonus compensations for the exellent job they did bringing the company to it's knees?

 

[SashatheMan]

On the one hand, fundamentally I don't think government should interfere with remuneration limits. I also have massive issues with Nick Sherry as a human being.
.

The government is not interfering with remuneration limits. It gives us the shareholders more power to decide if the CEO deserves it.
Excellent move in my opinion.

 

[whatashotbyseve]

Government intervention is rarely a good move. We desire a free market society - free from government interference.

As has already been mentioned, the government should stay well clear of this. Renumeration is a shareholder prerogative. If they are ambivalent to their executives wages, then that is their problem. But by the same token, businesses should never claim government support when the shit hits the fan.

 

[blue_chameleon]

It gives us the shareholders more power to decide if the CEO deserves it.
Excellent move in my opinion.

I couldn't agree more. Anything that gives more power to shareholders regarding remuneration of executives is a good thing.

Government intervention is rarely a good move. We desire a free market society - free from government interference.

As has already been mentioned, the government should stay well clear of this. Renumeration is a shareholder prerogative. If they are ambivalent to their executives wages, then that is their problem. But by the same token, businesses should never claim government support when the shit hits the fan.

So you're stance is that government should never, under any circumstance, intervene in companies? Would you ever shift that position?

It's certainly not ideal, especially when it's our generation globally that suffers with the debt forced on us from another generations greed and poor decision making.

Imo though, GM and the motor industry are one thing. Let them fail and have their place taken by a company that is more willing to adopt change. But for the moment, the likes of AIG needs to maintain it's solvency. Its quite frightening to think of the consequences of AIG failing and the global affect it would have.

 

[whatashotbyseve]

I would rather the government intervene via handouts for redundancies etc than throw money at a lost cause. Maybe this is the Keatingesque recession we had to have.

 

[Crestwood's_G]

what about golden showers?

 

[4lettersdown]

what about golden showers?

*standing ovation*
but seriously, isn't this quintessential democracy? the public bitches about something, and the government ruminates over a bill to make it appear that they hold the public interest in high regard, but in reality, the laws, if passed, would change little...

 

[Graney]

I'd like to see the government making moves to ensure those who currently hold riches and positions of power will become even richer and relatively more powerful in the future.

 

[wrong_turn]

i do not approve the fact that executives are paid the golden handshake that they are. and as others have mentioned earlier, if the shareholders are to approve of the golden parachute/handshake, the government should not intervene in this "free market".

in the circumstance of getting the golden handshake/parachute, it may be plausible for such a large amount may even be the chances of future employment. When a CEO is elected, their reputation is staked out also with the company with much of their income based on stock and bonuses.

As i mentioned earlier, their reputation is put on the line and if they succeed, they are hailed as great and larger firms of greater capitalisation may head hunt the ceo. however, in the event of failure, they are more likely not to be sought after for any manage related roles in the industry.

the main issue is, how often are fallen ceo's then taken by an equally great firm as the one they left let alone any prominent employment elsewhere?

 

[UndeadSamurai01]

Too bloody right - it's about time someone did something about those bloody execs.

 

[Nebuchanezzar]

Wealth isn't a zero-sum-game you utter imbecile.

It ought to be, you daft cunt

 

[Enteebee]

Well one thing I don't necessarily like is this idea that share holders should get a vote specifically on their payout. It matters little to me, but I think it makes more sense that they follow whatever regulations the company has set up.