Ceo Contracts Should Be About Risk, Not Retirement
Sydney Morning Herald
Saturday May 24, 2003
It's time corporate board members got smarter writing CEO employment contracts.
How bright do you have to be to provide that performance failure means no pay, not a pension for life?
High pay should mean high risk, not a contract for years regardless of performance.
Peter McDonell,
Tascott, May 23.
Brian Gilbertson seems like a nice man rides on trains; knows money doesn't buy happiness.
I hope he also knows that it does buy removal of landmines; provides prosthetics and clean water; repairs land degradation; puts food on the table (if you have a table); provides medicine and education. It can provide dignity and independence where there is only subsistence. I do hope some of those millions are reinvested in our world. (Psst you even get a tax break that way.)
Mary Purnell,
Revesby, May 23.
I hear that the bolshie Labour Council-commissioned report on CEO performance has shown a negative relationship between remuneration and company performance (``Want to make a motser? Then make certain the big boss isn't getting one", Herald, May 23).
On one hand the report is damned due to the source of its genesis and, on the other, it's stating the bloody obvious. If you pay peanuts you get monkeys, we are told, but monkeys (and the courts have been filled with them of late) are still monkeys and even if you pay them heaps, you just get back peanuts.
Richard Lynch,
Waterloo, May 23.
You poor man, Mr Gilbertson. How are you going to cope on a miserable little handout like $1.5 million per annum? That is a paltry $28,846.15 per week!
The mind is beggared by the figures involved and one can only ponder what the fee for success would have been. Truly it can be said that corporate ethics are well and truly in the garbage bin now, and the practice of paying gold-plated monkeys huge amounts is very much in question.
Just as well we have a nice dole office to look after us lesser orders, when the foul foxes foul the fowl house. But one day there must be a reckoning.
Frank McQuade,
Kogarah, May 23.
I can't express how unhappy I am that BHP Billiton's Brian Gilbertson is unhappy that money fails to make him happy. In acknowledging that $12.4 million for a six-month stay may be a reason for this unhappiness, maybe it is really the mining business he is not cut out for, but with a set of values like this he has an exceptionally bright future in the banking dodge.
Bill Carpenter,
Bowral, May 23.
BHP: Blatantly High Payouts or Brian's Hip Pocket.
John Camroux,
Caringbah, May 23.
On the subject of large payouts to directors, at the 2001 AGM of NRMA Insurance (now called IAG) I put forward a resolution that would have required shareholder approval for all directors' retirement allowances.
This was opposed by the board, which resulted in the resolution being defeated.
I said at the time that a similar rule should be in the constitution of every company.
Richard Talbot,
Eastwood, May 23.
When are we going to make it official and rename the Commonwealth as the Corporatwealth?
Graeme Finn,
St Peters, May 23.
``CEOs aren't worth the money they're paid" is the heading on Elizabeth Knight's Abacus column (Herald, May 23). I am just one of the many shareholders who heartily agree with her, but shouldn't the same scrutiny include chairmen and company directors, who also ensure their own financial security? Why doesn't a contract with a CEO or any other senior executive provide for serious non-performance, based on recognised criteria and no severance payment?
Why do large fund managers remain mute and fail to exercise their voting power to prevent these nauseating examples of greed and excess? I suspect the answer is that many belong to an exclusive boys' club of back-scratching, and the shareholders get a few crumbs flicked off the table if they are lucky.
F. W. Taylor,
Turramurra, May 23.
There is something seriously wrong about the predictable outcry at the Brian Gilbertsons of the world being paid a pile of money in return for a lifetime of hard work and an important contribution to our economy; yet when the Kidmans and the Crowes get paid $US20 million for giving us something to watch for a couple of hours on Friday night, nobody bats an eyelid.
Personally, I find the remuneration to movie stars and rock stars to be far more obscene than anything paid to the world's senior executives, and if people want to whinge about leeches bleeding hardworking people dry, they should start with the high-profile bludgers we see on our silver screens.
Not that I blame them personally; who wouldn't take that sort of money for acting in a movie? The question is, why are the rest of us prepared to subsidise it at the box office on one hand, while complaining about what businessmen earn on the other?
Stuart Moin,
Randwick, May 23.
© 2003 Sydney Morning Herald
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