It’s been a difficult week for big business, with Qantas distracting everyone from what employers thought the real issue should be — Labor’s outrageous industrial relations changes to better protect “contractors” and to criminalise wage theft. Like most IR changes in favour of workers — and the Fair Work Act itself, back when Julia Gillard secured passage of it in the Rudd years — it will end investment, destroy productivity, smash economic growth and otherwise usher in the four horsepeople of the apocalypse.
The case of the wage theft element of the bill is interesting, however, as the lobby group for the biggest businesses, the Business Council of Australia (BCA), can’t bring itself to oppose criminalisation. That might relate to the fact that, by our count, 39% of BCA members have been pinged for underpaying workers. And that includes some of the worst offenders, such as Wesfarmers, BHP, the big banks, the Go8 universities and a number of big law firms.
That two in five members of the business elite engaged in underpayment illustrates the extent to which wage theft became not merely an epidemic in Australia, but a defining feature of the way Australian business conducted itself, and a core part of its operating model.
But while systemic wage theft was being carried out across the economy, CEOs and company executives were, luckily, spared. They didn’t even endure any of the wage stagnation that faced Australian workers from 2013 onwards. According to data compiled last year by the Australian Council of Superannuation Investors, the average remuneration of ASX100 CEOs increased by nearly 90% between 2014 and 2021 in nominal terms, compared with an 18% increase in the wage price index in the same period, or from less than 80 times average adult earnings to more than 100 times.
Which is fine, of course, because we know CEOs work 100 times harder and longer than, say, nurses, teachers, factory workers and delivery drivers.
The CEO remuneration story of course is complicated by what’s fixed, what’s a bonus, what’s cash, what’s shares, and what’s a termination payout. But that’s where there’s an interesting wage theft angle.
Take BlueScope Steel (shock horror — another BCA member, and also pinged for underpayment). It was fined a record $57.5 million in the Federal Court last week for trying to fix the price of flat rolled steel products a decade ago. The company and then-general manager Jason Ellis (who was fined $575,000, which was to be paid by him and not BlueScope by court order) were convicted last December of trying to “induce” eight other Australian distributors and one overseas manufacturer into agreements to fix or raise prices for flat steel products between 2013 and 2014. Ellis was sentenced to eight months’ jail and released on a recognisance in late 2020.
But a decade on, it’s BlueScope shareholders who wear the cost of the fine.
Now, what about Alan Joyce, given prominent BCA member Qantas could be facing a fine many times bigger than the one BlueScope copped, for its fake flights scandal?
Qantas issued Joyce $10.8 million in shares last Friday after the airline met its profitability targets. Joyce is also expected to receive a short-term bonus of up to $4.3 million and about $8 million in shares as part of his long-term bonus. The exact amount, in addition to Joyce’s base salary, will be known later this month, when Qantas releases its annual report. But the board is under pressure to not make any bonus payment — cash or shares — to Joyce given the case now before the courts.
What the Australian Competition and Consumer Commission (ACCC) alleges about Qantas is similar to the fee for no service revelations about AMP and the big banks, and money-laundering breaches by the banks. At NAB, CEO Andrew Thorburn quit along with chair Ken Henry after the banking royal commission, and lost tens of millions in long-term share options. Then-Commonwealth Bank CEO Ian Narev lost his bonus over the money-laundering breaches and then stepped down. Westpac CEO Brian Hartzer quit and lost his short- and long-term bonuses over money laundering in 2019. The same year, ANZ’s Shayne Elliott had his incentive payments docked for poor performance.
So how to penalise Joyce and the Qantas board as well as the many executives who must have known about the fake flights? What about incoming CEO Vanessa Hudson, who would have been in prime position to spot what was going on?
If the government wants to be comprehensive on wages theft, the Qantas scandal could be used to revamp corporate remuneration laws by delaying bonus shares for departing senior executives and board members for several years after they have gone. The same with short- and long-term cash payments in the final year of their terms.
There should also be a regulation introduced that bans boards and executives from being able to be indemnified by the company’s D&O (directors and officers) insurance policies. It can be done, as happened to Ellis in the BlueScope case.
For shareholders, it would be some assurance that one particular kind of wage theft is also being restricted, along with the more common variety.
Sure enough, Joyce getting many millions in various bonusses for what he’s done is sickening. But he would be completely justified thinking there’s something equally sickening about the Qantas board members — of all people! — saying he does not deserve the money. These are the people who appointed Joyce; who backed him to the hilt all the way; who approved all his decisions; who rewarded themselves as much as him for the results he was getting. There was not a sniff of criticism or doubt from the board throughout Joyce’s time at Qantas. It is absolutely wrong for the board to now turn on Joyce as their scapegoat. They should all resign. What a bunch of grubs and snivelling self-serving turncoats.
The penalties should hit them all
Something should hit them all.
(Can someone tell me how to get italic and/or gold happening here?)
/lack of edit button eyeroll
This is one of the reasons for punishing tax rates on ridiculously high incomes, and dedicated legislative and ATO teams to identify and close loopholes as they are exploited.
Just to be clear, that’s the opposite of the actual tax rate policy and enforcement of all AU governments over recent decades, and this government is dedicated to continuing that way, see for example its absolute commitment to the stage three cuts. Taxes on wealth (income, capital gains, inheritance tec.) have all been substantially reduced or removed entirely, and enforcement has been deliberately crippled by savage cuts in resources and choosing not to investigate (despite the government knowing that each tax investigator can be expected to recover taxes amounting to multiples of their salary each year). A fascinating contrast with the obsessive pursuit of the far smaller sums involved in welfare claimant fraud. Like Leona Helmsley said, taxes are only paid by the little people.
The only reason to go after the rich that will count is that torch-welding mobs are building guillotines in the city squares.
Sadly, it seems that day is a long way off.
Seems like anyone still watching commercial telly or buying the newspaper would happily stand in line to suck off a billionaire. So over it
Noticed both these comments got a downvote; QED
Great idea BK
Damn strait. Don’t hold your breath waiting for anyone important to repeat it though…
Ooh, maybe Pocock.
Damn strait. Don’t hold your breath waiting for anyone important to repeat it though…
Ooh, maybe Poc0ck.
Fck the stupid censorship here. Nobody’s stopping me swearing when I want to, only just everyone trying to post totally innocuous stuff.
Apropo of nothing, but, looking at that photo, you wouldn’t want to meet Westacott up a dark alley. What’s the saying? Eyes are window to the soul? In this case, seems that entire face is a reflection of personality.
Posting about people’s looks is generally frowned upon, but they always seem to choose very unflattering pics of the villains…
A slightly better saying to reference might be the one about everyone having the face they deserve by forty.
Tell you what though, Westacott wouldn’t want to meet me up a dark alley. I don’t look at all murderous, but I’ve never met any of the 0.01%.
A famous broom jockey shows here bright side…
Why are all these Big Biz Boys (and in these circumstances I think the term applies regardless of one’s gender) paid eyewatering bonuses for actually just doing their job?
Do the multimillions of annual salary not motivate them sufficiently to carry out the tasks assigned to them by the board without the additional lure of a few more more million? Meanwhile of course, those at the bottom of the wages Tree of Life get no millions, no bonuses and often not even the promised wage bestowed upon them through the largesse of said boards, because these companies find ever more devious ways of fleecing their own staff so the CEO can snaffle an even bigger bonus.
Are we so deeply mired in the capitalist Slough of Despond that this ethically barren modus operandi is viewed, even by the Party of Labor, as perfectly fine? Apparently so. Wages theft is now de rigeur in any stockmarket-worthy corporation, even though if but one employee pinches a few bucks out of petty cash they will be tossed in gaol for ‘stealing from the company’. No bonuses for the paramedics, the teachers, the nurses, the firies, who do their jobs often in the most difficult circumstances, at significant cost to themselves and their families, and if they’re lucky they get a pat on the back, but not, you will have remarked, even a decent wage, let alone a fat bonus just for showing up.
It is incomprehensible to me that we value the ability to make money by depriving others of their right to live a decent life over any other consideration. We actually applaud these people bereft of any moral standards rather than chucking them in gaol for the theft they perpetrate on thousands.
Our country is going from madness to full-tilt insanity.