Australian CEOs are still getting their bonuses. Why?

Almost all of the best chief executives of Australia, at least according to their boards, remove the park in terms of performance.

Nevertheless sluggish efficiency– permanent high carbon emissions– rising inequality and Australia’s public expenditures on research and development Between the lowest In OECD.

Accordingly New data 91% of the Australian Pension Investors Council, 91% of Australia’s senior general managers (CEOs) received some kind of performance bonus last year. This increased their payments a lot of their basic salaries (already over $ 1 million). Suitable for the bonus, only five CEOs took zero from 142.

The fact that almost all of the best CEOs of Australia receive these performance bonuses, performance payment is related to rewarding compliance and discipline by risk of risk and entrepreneurship.

Do we really believe that 91% of our CEOs made big bets paid last year? A more reasonable explanation is that we reward because they do not fill the managers. Customer bases grow in line with population growth and prices are increasing faster than production costs, which means that profit increases without much effort.

Not to keep up with change

Take the electrical industry, for example. It is difficult to imagine an industry in which change is more inevitable than the industry responsible for getting away from gas and coal fuel power plants.

However, according to the Australian Statistical Office, the electricity, gas and water industry is only 0.24% of sales Every year in research and development. Half of the average across the economy.

Unfortunately, innovation does not seem to be a prerequisite for rewarding CEOs with large bonuses. According to Energy Australia, CEO Mark Collette (Over $ 1 million basic salary) Recently, he challenged a room full of other good paid leaders in Australian Energy Week: “Will this make this energy cheaper?“

However, instead of focusing on lowering costs for consumers, companies sometimes resorted to misleading expressions. Energy Australia has recently accepted Misleading customers He was a “carbon neutral”, claiming the coal and gas -fueled electricity he sold.

Energy Australia has been widely used Carbon offset The fossil fuel fired electricity to claim is neutral. Energy Australia accepted in apology “Offies not prevent Or take back damage caused by the burning of fossil fuels for a customer’s energy use ”.

Although it is clear that the expenditures of Australia on carbon loans do nothing to make the company’s energy cheaper, it is not yet clear whether the Board will give a “performance bonus”.

Leader to the world – in payment packages

Another example of the lack of relationship between CEO Pay and organizational performance is the sector of Australian University. Vice President of Australian Universities Best paid in the worldMore than a dozen, he won more than the President of Cambridge University of Australian.

However, there is no relationship between Student satisfaction and the vice president payment.

And Australian Vice President Pay, while the Australian universities are shifting steadily Lower International rankings For university quality.

Inequality is increasing

Although performance -based bonuses and incentives are common between the CEOs and the Vice President, the same does not apply to lower paid personnel.

Instead, even if the real wages are reduced, they are generally asked to “do more”. Universities saw a remarkable decline Academic staff per student The gap between the lecturers and the vice president jumped.

For CEOs and Vice President, extremely high salaries, Australia did nothing to increase our performance in global rankings for our universities, research and development or innovations. Paying large bonuses for average performance also did very little to help.

Inequality in Australia is increasing. As long as the CEO share increases faster than the minimum wages, this gap will continue to expand. . Latest data The CEO showed that their salaries were 55 times the average worker.

Just doing their jobs

Although it is difficult to measure the performance of a CEO, it is difficult to measure the care and attention provided by a child care worker, the compassion of an elderly care nurse, the benevolence of a call center operator, or the enthusiasm of a lecturer.

Very few CEO thinks we need bonuses to motivate the vast majority of Australian workers. However, it is perversion to suggest that people at the top of a large organization can work carefully without a giant bonus.

So, in Australia, the unequal is not just income. We expect to motivate itself more than the top people under the income distribution.