In the midst of a global recession, few issues have galvanized public anger in developed countries as much as the extraordinary sight of senior company executives helping themselves to huge pay rises, whilst ordinary people are thrown onto the unemployment scrap heap or forced to accept wage freezes or shorter working hours.
The issue has been on a slow burn around the world for many years, but recent economic events have thrown into stark relief the sheer obscenity of excessive executive pay, contrasted with how the great majority of the world's workers are expected to get by.
Over the period 1990 to 2005 on average Australian workers' wages went up by 85% while at the big end of town the increase was 564%.
Frequently executives attempt to justify their exorbitant increases through the use of so called "independent" remuneration consultants.
Inevitably these guns for hire recommend increases that are above the median for other high fliers in similar jobs.
It's a case of keeping your paymaster happy and pushing the bar higher.
The irony is that when it came to trade unions bargaining for their members, this approach, known in industrial relations parlance as "comparative wage justice," has been frowned upon by employers and governments for the last 20 years.
Clearly it's a case of "do as I say not as I do," with Business Council of Australia CEOs' pay increasing from 18 times average weekly earnings in 1990 to 63 times in 2005.
Most recently the Sol Trujillo's and others have helped fuel the contempt many ordinary people feel for these "corporate cowboys" who seem to be able to pay themselves whatever they please, almost in defiance of economic realities and public sentiment.
Like on an increasing number of fronts, the US is undeniably ahead of Australia in addressing this issue.
Here, the free market fetishists and zealous deregulators continue to hold sway.
Prescriptive solutions to address excessive executive remuneration are still being resisted in the corridors of power.
Yet at the Government's fingertips there is a potentially powerful remedy to this problem that need not involve that most heinous of public policy crimes, regulation.
The current Productivity Commission inquiry into executive remuneration could and should be asked to develop "indicative" or "best practice" guidelines for Australian business, that define fair and appropriate levels of executive remuneration across a range of corporate settings.
The Government should then determine that these guidelines need to be adopted and complied with by any Australian business tendering for Government contracts in the future.
The issue has been on a slow burn around the world for many years, but recent economic events have thrown into stark relief the sheer obscenity of excessive executive pay, contrasted with how the great majority of the world's workers are expected to get by.
Over the period 1990 to 2005 on average Australian workers' wages went up by 85% while at the big end of town the increase was 564%.
Frequently executives attempt to justify their exorbitant increases through the use of so called "independent" remuneration consultants.
Inevitably these guns for hire recommend increases that are above the median for other high fliers in similar jobs.
It's a case of keeping your paymaster happy and pushing the bar higher.
The irony is that when it came to trade unions bargaining for their members, this approach, known in industrial relations parlance as "comparative wage justice," has been frowned upon by employers and governments for the last 20 years.
Clearly it's a case of "do as I say not as I do," with Business Council of Australia CEOs' pay increasing from 18 times average weekly earnings in 1990 to 63 times in 2005.
Most recently the Sol Trujillo's and others have helped fuel the contempt many ordinary people feel for these "corporate cowboys" who seem to be able to pay themselves whatever they please, almost in defiance of economic realities and public sentiment.
Like on an increasing number of fronts, the US is undeniably ahead of Australia in addressing this issue.
Here, the free market fetishists and zealous deregulators continue to hold sway.
Prescriptive solutions to address excessive executive remuneration are still being resisted in the corridors of power.
Yet at the Government's fingertips there is a potentially powerful remedy to this problem that need not involve that most heinous of public policy crimes, regulation.
The current Productivity Commission inquiry into executive remuneration could and should be asked to develop "indicative" or "best practice" guidelines for Australian business, that define fair and appropriate levels of executive remuneration across a range of corporate settings.
The Government should then determine that these guidelines need to be adopted and complied with by any Australian business tendering for Government contracts in the future.
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