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

[bshoc]

Its not that simple.

Many executives are not particularly talented and have got their lucrative positions through cronyism and nepotism.

Yep, rep

This is because the government has created a moral hazard, where corporate losses are protected by the government through implied guarantees.

It may be part of the problem here, but moreso in the US and Europe.

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.

It appears that the shareholders prefer being told what to pay executives and being bailed out, especially now.

In any case action to limit ridiculous payouts and wages are long overdue, they represent the kind of excess and greed that got us to our current economic hole in the first place.

 

[gurusson]

i would like to point out that it will only be shareholder decided. this is a good thing as the handout comes out of the shareholders dividend. do u want a CEO that has already cost you money taking more of it?

 

[S.H.O.D.A.N.]

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

Indeed, I don't really smell any 'brain-drain causing government intervention' here at all, as Graney claims.

Maybe I'm being naive, but if an executive is getting a bonus so large it requires shareholder approval, and the shareholders deny it, that's probably a good thing for the company.

 

[S.H.O.D.A.N.]

It ought to be, you daft cunt

Wishing wealth to be a zero-sum game is such an absurdly sadistic notion that I'm going to assume that post was one of your myriad poor attempts at a joke.

 

[moll.]

AFP: Australia to outlaw excessive 'golden handshakes'

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

No it won't Graney, and you know it.
America is on the verge of introducing similar measures, which could actually end up being harsher. Britain too.
The phenomenom of multi-million dollar "golden handshakes" for CEOs is strictly part of Anglo-American corporate culture. The $20 million resignation handouts don't happen in mainland Europe or in East Asia on the same scale or frequency as occurs in North America, Australia and Britain.
Australia will remain just as competitive as ever.

 

[SashatheMan]

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.

Why? The shareholders give the company money they should have some say.

 

[Enteebee]

When a shareholder buys a share in a company they are still subject to the constitution of the company including any provisions for corporate governance.... If you buy a share where you are told for instance that you will not have voting rights on certain matters in the prospectus or whatever then I think it's fair that you don't have a voting right, the government shouldn't make such a right mandatory.

 

[S.H.O.D.A.N.]

If you buy a share where you are told for instance that you will not have voting rights on certain matters in the prospectus or whatever then I think it's fair that you don't have a voting right, the government shouldn't make such a right mandatory.

The government should make such a right mandatory if it makes sense to do so and you notably have not provided any reason why it shouldn't. Is your claim that all government intervention is bad? Australia's history of precisely targeted sensible regulation of markets is the reason our banking system is rolling in cash right now while banks overseas squirm.

 

[blue_chameleon]

When a shareholder buys a share in a company they are still subject to the constitution of the company including any provisions for corporate governance.... If you buy a share where you are told for instance that you will not have voting rights on certain matters in the prospectus or whatever then I think it's fair that you don't have a voting right, the government shouldn't make such a right mandatory.

Holders of ordinary shares possess the right to vote, whereas those who hold preferential shares don't possess that right.

The vast majority of shares that a company offers to the market are ordinary shares. To my knowledge, the legislation doesn't appear to change this fact of which shareholders actually have voting rights and which don't have the rights. I've also commented earlier in the thread about the disparity between the actual rights of holders of ordinary shares when it comes to remuneration discussions at AGM's, opposed to the perceived rights they actually hold according to the Corp Act.

 

[wrong_turn]

When a shareholder buys a share in a company they are still subject to the constitution of the company including any provisions for corporate governance.... If you buy a share where you are told for instance that you will not have voting rights on certain matters in the prospectus or whatever then I think it's fair that you don't have a voting right, the government shouldn't make such a right mandatory.

last time i checked im quite sure that the corporate governance of a company was to protect shareholder rights and also to further prevent corruption within a company.