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Unions campaign to slash executive salaries
Dylan Lautner
Australia, June 1, 2009 - The Australian Council of Trade Unions (ACTU) will launch a campaign to urge the Federal Government to restrict executive base pay at 10 times the average wage of their full-time employees.
ACTU will push for the policy during the congress in Brisbane this week. It comes after the Government called for an investigation of executive pay for poor performing companies such as Pacific Brands and Telstra.
According to ACTU the top 50 publicly listed companies increased chief executive pay by 564 percent between 1990 and 2005 by $3.4 million. The executive pay in 1990 was pegged at 18 times higher than the average full-time wage. In 2005, it jumped to a whopping 63 times. At the end of 2008, the average full-time wage was about $63,000 a year.
ACTU secretary Jeff Lawrence said that the outrageous executive salaries encourage excessive risk-taking and short-term thinking, which he believes are to be a major cause of the global financial crisis. The union council says that its proposal for a salary cap would be legal under the corporations power of the constitution.
However, there is conflict to the latest push by ACTU represented by the Australian Industry Group. According to chief executive Heather Ridout, ACTU's proposals are "unworkable and inappropriate". She says that "To try to set these sorts of arbitrary rules and legislate for them, I don't think it would work in the type of economy we have in Australia."
Ridout is in agreement that executive pay may have gone out of sync with community standards and that shareholders could play a greater role in setting pay. She contests that wages for employees and executives are best set by the market.
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http://www.nationalvisas.com.au/blog/australian-news/unions-campaign-to-slash-executive-salaries/
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6/1/2009
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