ANZ chief mystified over anger at executives' high pay
EXECUTIVE pay is a hot topic, but one of ANZ's most senior executives says he is mystified that Australians love hearing about the millions paid to athletes and movie stars, but slam the remuneration of corporate leaders.
EXECUTIVE pay is a hot topic, but one of ANZ's most senior executives says he is mystified that Australians love hearing about the millions paid to athletes and movie stars, but slam the remuneration of corporate leaders."We seem happy and even proud when our sports people make it onto the list of the top 20 paid people, or similarly when our entertainers make it on Hollywood's best-paid list," ANZ Australia chief executive Phil Chronican told an American Chamber of Commerce in Australia lunch yesterday."Yet for some reason when people are managing large complex businesses it is seen as excessive."Mr Chronican said the issue was not whether an executive was paid $1 million, $3 million, $5 million or more, but why."Just like sports people and entertainers, senior executives' careers do come to an abrupt end," he said.Mr Chronican said the disclosure of the salaries of executives of listed companies was important for transparency."Maybe we should look to extend the disclosure to other groups who are in positions of power in their community, including those who are managing public superannuation savings."While acknowledging that for most Australians, "any level of executive pay looks high, even stratospheric", Mr Chronican, who earned a combined $2.2 million in compensation in 2011, said that the real issue was how big were the risks that bankers were hired to manage. "What returns do they earn shareholders? How do they serve customers? Are they good employers?"In a wide-ranging speech, Mr Chronican, who oversees ANZ's domestic operations, said many Australians were not feeling the benefit of the mining boom, which had contributed to the change in consumer activity in recent years."Despite our strong economy, many Australians feel worried about our prospects in the face of uncertainty in Europe and many, particularly outside the fast lane of the mining and resource sector, feel they're not seeing the benefits," he said.Although Australia continued to grow thanks to Asian demand for resources, the country was undergoing "a period of quite painful structural change", he said. Bank growth would be hit by slowing business and household credit demand, which remained at a 30-year low, while household savings were at a 30-year high.The rising cost of banking would reduce shareholder returns from banks in the future, he said."Banking is going to be more expensive due to the higher costs of funds and higher regulatory requirements," he said.Mr Chronican also noted an anomaly in overseas views of Australia and its real estate market."Overseas investors have a very odd set of views about Australian property prices," he said."They on one hand look at the stability and take a lot of comfort from it. The other is they cannot believe Australia was able to not have a property price collapse," Mr Chronican said.