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Summer 2003

Costello's Plan will not Stop Executive Salary Outrages

The Federal Government’s new corporate governance reforms will not stop skyrocketing executive salaries, the ACTU believes.

ACTU President, Sharan Burrow, said that the proposals announced by Treasurer, Peter Costello, yesterday are another do-nothing response.

"The government's plans to give shareholders a vote on executive salaries will not control CEO pay packets because the vote would be non-binding."

"In most relevant cases shareholder votes would be dominated by major institutional investors, whose own CEOs are often pocketing exorbitant salaries."

Ms Burrow called on the government to legislate additional measures including to: remove the corporate tax deductibility of executive salaries and payouts of more than $1 million; require full disclosure of all remuneration including share incentive schemes, share options and bonuses and details of how remuneration relates to performance;

• require all remuneration arrangements to be expensed in company profit and loss statements; and

• allow options to be exercised only on a set date or after a set period following the holder's departure from the company.