For immediate release Tuesday, 16 November 2010

Westpac CEO pay unethical says union

Bank workers' union Finsec says the $5.59 million pay package of Westpac CEO George Frazis is unethical given the current economic conditions and the tax payer support of the bank over the past year.

Media reports suggest it is the largest pay package in New Zealand corporate history.

"We think it is unethical to pay such a large salary to one person while the economy falters and the average worker has seen no or limited wage growth," said Finsec Campaigns Director Andrew Campbell.

"We are concerned that the package has a high proportion, $1.5 million, relating to short term benefits. An excessive focus on short term gains for senior bankers was a key driver of the global financial crisis and economic collapse," said Campbell.

"This pay package raises serious questions about the need for executive salary controls in New Zealand as are being discussed in Australia. Regulators should also be concerned about pay packages that have high levels of short term rewards in them," said Campbell.

"There is no public accountability in relation to this salary package despite it being in place while the bank was underwritten by the government guarantee scheme. It is galling to know that the tax payer was also writing an extravagant pay deal for the bank's boss," said Campbell.

"While Westpac staff did receive a pay increase this year it came after a significant campaign following a zero offer. It looks like George Frazis didn't have to argue with the bank's board the way we argued with his HR team to win a reasonable pay deal," said Campbell.

"Hard working front line staff earn a fraction of this but often work long hours in tough conditions. We urge the Westpac board to consider measures to make pay across the bank more equitable," said Campbell.

ENDS

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