Australia’s top banking executives are being lambasted for taking home hefty pay rises. But their earnings are peanuts (or merely peas) compared to the earnings of their counterparts in the US.
Who are the local fat cats? National Australia Bank’s CEO John Stewart has had a handsome 30 per cent pay rise, taking his earnings to AU$8.4m. Commonwealth Bank’s Ralph Norris is on AU$12m only months after becoming CEO. And Allan Moss, chief executive officer of Macquarie Bank is now on the mouthwatering mega-sum of AU$21m per year after receiving an AU$3m raise.
Is this just excess in the bull market, or are we seeing a new way of life at the top end?
Edmund Gill, director of recruiter Hays, says it’s all down to globalisation. “If you want to compete globally, you have to get the best people from anywhere in the word, and to do that you have to offer salaries that stand up internationally.”
If this is really so, however, Australia’s banking executives may soon pack their bags and head elsewhere. Most particularly, they might just head to the US, where pay is monumentally higher.
Take Dick Fuld, the chairman and chief executive officer of Lehman Brothers. Last year Dick took home a salary of US$34.5m (AU$43.8m). He also owns US$250m in shares, and has just been offered an extra US$186m if he stays with the bank for another ten years.
Even Moss looks poor by comparison.