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Time to Double-Down on Cutting CEO Salaries

18th Nov 2018

With reports of a slow-down in CEO pay rises last year, it’s time for Kiwi corporates to double down on cutting excessive salaries to ensure this is a trend not an accident, said Peter Malcolm, spokesperson for the income equality project Closing the Gap.

In its annual survey of top CEO’s pay rates, The New Zealand Herald reported smaller rises last year than in previous years, but the slow-down is far from enough to put a serious dent in the ongoing obscene mismatch between worker and CEO pay.

“The tiny slow-down in CEO pay rises — they increased 2.2 percent last year compared with a 3.3 percent rise in 2017 — is welcome news, but we’re not seeing any real commitment to tackling over-blown CEO as a matter of fairness and equity,” Mr. Malcolm said.

“According to the Herald, 38 of the 50 executives surveyed still earn 55 times the median annual income of around $32,000, levels every CEO and every board chairman and every director should be working to change,” Mr Malcolm said.

“We also need to debunk the idea that CEO pay has anything to do with performance. In fact, according to Otago University’s Dr. Helen Roberts, the opposite is true, with the best performing companies having the lowest paid CEOs.”

And who can forget Fonterra’s Theo Spierings who was the highest paid CEO in the country last year, earning $8.3 million, as he presided over the biggest loss in his company’s history, Mr. Malcolm said.

But, he said, there are good examples out there, like Agoge, a Deloitte’s NZ Top 50 growth HR company, that won’t pay anyone in the organisation more than twice the annual average salary.

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“Reining in excessive CEO pay is good for society, and good for companies too — we look forward to seeing more leadership from the corporate sector on this issue,” Mr Malcolm said.
MORE INFO:
CEO pay rises slow: https://www.nzherald.co.nz/index.cfm?objectid=12134854&ref=twitter
OU research: https://www.otago.ac.nz/business/research/department/otago119826.html
Fonterra: http://www.scoop.co.nz/stories/PO1803/S00304/spierings-case-shows-excessive-ceo-pay-isnt-justified.htm

ends

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