1 00:00:03,640 --> 00:00:06,200 Speaker 1: Welcome to Ask Fear and Greed, where we answer questions 2 00:00:06,200 --> 00:00:09,959 Speaker 1: about business, investing, economics, politics and more. Are Michael Thompson 3 00:00:10,000 --> 00:00:11,160 Speaker 1: and Hello Sean Ale. 4 00:00:11,440 --> 00:00:12,719 Speaker 2: Hello Michael Sean. 5 00:00:12,760 --> 00:00:15,040 Speaker 1: Today's question is it's quite a topical one. There's a 6 00:00:15,040 --> 00:00:17,440 Speaker 1: lot of talk at the moment about CEO pay and 7 00:00:17,520 --> 00:00:21,759 Speaker 1: so the question today is why aren't the CEOs of 8 00:00:21,800 --> 00:00:25,680 Speaker 1: Australia's biggest companies the highest paid? 9 00:00:26,680 --> 00:00:27,960 Speaker 2: Well, that would make sense, wouldn't it. 10 00:00:28,000 --> 00:00:30,760 Speaker 1: I mean, it's logical, right, because I mean, and we've 11 00:00:30,800 --> 00:00:32,760 Speaker 1: had the research in the last twenty four hours come 12 00:00:32,800 --> 00:00:36,320 Speaker 1: from the Australian Council of Superannuation Investors who every year 13 00:00:36,400 --> 00:00:39,479 Speaker 1: take a really good look at CEO pay across the 14 00:00:39,520 --> 00:00:42,280 Speaker 1: ASX two hundred and basically put it out there for 15 00:00:42,360 --> 00:00:43,280 Speaker 1: everyone to see. 16 00:00:43,680 --> 00:00:47,400 Speaker 2: Yes, look it's actually not logical. We laugh. So should 17 00:00:47,400 --> 00:00:51,400 Speaker 2: Commonwealth Banks Matt common CEO, biggest company on the boss, 18 00:00:51,520 --> 00:00:54,080 Speaker 2: should he receive most money? I actually think that people 19 00:00:54,200 --> 00:00:58,440 Speaker 2: should do best, the people whose companies do best, whose 20 00:00:58,520 --> 00:01:04,560 Speaker 2: remuneration is aligned with the company and its share price performance. 21 00:01:04,880 --> 00:01:09,360 Speaker 2: Having said that, the number one guy, Australia based guy 22 00:01:09,440 --> 00:01:13,600 Speaker 2: called Victor Herrero from La Visa Holdings. He took on 23 00:01:13,720 --> 00:01:17,319 Speaker 2: nearly forty million dollars. Lavisa Holdings isn't even a top 24 00:01:17,319 --> 00:01:18,119 Speaker 2: one hundred company. 25 00:01:18,200 --> 00:01:20,760 Speaker 1: No, No, it would be hard to also argue against 26 00:01:20,760 --> 00:01:24,959 Speaker 1: Matt Common in theory, considering that that company just keeps 27 00:01:25,000 --> 00:01:27,679 Speaker 1: on going in terms of the share price climbing and 28 00:01:27,720 --> 00:01:31,040 Speaker 1: climbing and climbing and climbing. He would think at least 29 00:01:31,360 --> 00:01:33,200 Speaker 1: if not number one, then he might be number two 30 00:01:33,319 --> 00:01:36,520 Speaker 1: or three, or four or five or anywhere in the 31 00:01:36,560 --> 00:01:37,040 Speaker 1: top ten. 32 00:01:37,400 --> 00:01:42,160 Speaker 2: He's eighteen. So in a sense, I think that these 33 00:01:42,319 --> 00:01:44,880 Speaker 2: league tables, I like the AXI one because it actually 34 00:01:44,880 --> 00:01:47,840 Speaker 2: talks about realize pay, take on pay, and it's a 35 00:01:47,840 --> 00:01:50,520 Speaker 2: good way to compare. Now Robert Thompson, who's the sea 36 00:01:50,560 --> 00:01:54,120 Speaker 2: of News Corp, New York based, He's realized pay forty 37 00:01:54,160 --> 00:01:58,040 Speaker 2: two million dollars. If you compare that to let's say, 38 00:01:58,480 --> 00:02:01,080 Speaker 2: I mean over the year News corps total shareholder return 39 00:02:01,200 --> 00:02:03,600 Speaker 2: was forty six percent. Take it over five years, though, 40 00:02:04,000 --> 00:02:07,840 Speaker 2: so you can actually see how much they're growing the company. 41 00:02:08,160 --> 00:02:11,640 Speaker 2: So Robert Thompson over five years eighteen percent, forty two 42 00:02:11,880 --> 00:02:14,600 Speaker 2: million dollars. News cop isn't a big company anymore. It 43 00:02:14,680 --> 00:02:18,800 Speaker 2: used to be massive. It's not anymore. Lavisa Holdings Victor Herrera. 44 00:02:18,880 --> 00:02:22,520 Speaker 2: We've told him his total shareholder return twenty seven percent, 45 00:02:22,919 --> 00:02:26,360 Speaker 2: so he's actually made a lot of money for shareholders 46 00:02:26,680 --> 00:02:31,760 Speaker 2: each year over that time. But is anyone worth forty 47 00:02:31,800 --> 00:02:35,320 Speaker 2: million dollars, I don't know now. The next on the 48 00:02:35,400 --> 00:02:41,040 Speaker 2: list is Shamara Wickrameni Yaka. What the boss of mcquarie 49 00:02:41,200 --> 00:02:45,679 Speaker 2: has always been really well paid, her predecessor, same deal, 50 00:02:46,639 --> 00:02:50,119 Speaker 2: and it has grown continuing. So Mcquarie is a top 51 00:02:50,120 --> 00:02:52,440 Speaker 2: ten company. It's growing over the last five years about 52 00:02:52,440 --> 00:02:55,360 Speaker 2: thirteen percent per annum. So for her to get paid 53 00:02:55,400 --> 00:03:00,160 Speaker 2: a lot, whilst it is slightly obscene, at least she's 54 00:03:00,200 --> 00:03:04,200 Speaker 2: sort of somewhere near deserving it, particularly because Mcquarie, as 55 00:03:04,200 --> 00:03:07,360 Speaker 2: opposed to the other four big banks, it's a global bank. 56 00:03:07,760 --> 00:03:11,240 Speaker 2: It operates in global markets. So to get a good CEO, 57 00:03:11,400 --> 00:03:15,400 Speaker 2: you actually need someone who is a global CEO, and 58 00:03:15,480 --> 00:03:19,640 Speaker 2: so Shamara Rahmona Yaka fits into that category. The number 59 00:03:19,639 --> 00:03:22,239 Speaker 2: four is Goodman Group's Greg Goodman. He holds a bunch 60 00:03:22,280 --> 00:03:26,000 Speaker 2: of shares twenty percent per year return for shareholders. That's 61 00:03:26,040 --> 00:03:29,000 Speaker 2: a pretty good return. He founded that company. I can't 62 00:03:29,080 --> 00:03:33,440 Speaker 2: have less gripes about people who find company who founded 63 00:03:33,440 --> 00:03:34,359 Speaker 2: companies and get paid. 64 00:03:34,240 --> 00:03:39,520 Speaker 1: A lot as the founders of fear and greed exactly exactly. 65 00:03:40,320 --> 00:03:42,240 Speaker 2: Then there is, I mean, the guy called Mick Farrell, 66 00:03:42,600 --> 00:03:46,320 Speaker 2: who's ResMed US based. Don't you think you love Mick 67 00:03:46,360 --> 00:03:50,400 Speaker 2: Farrell being US based? The most Australian name ever, probably 68 00:03:50,400 --> 00:03:54,880 Speaker 2: the most Irish name ever, but we'll take that. He's next. 69 00:03:55,280 --> 00:03:58,040 Speaker 2: Then Mike Henry at BHP Group. You know, nine million 70 00:03:58,040 --> 00:04:01,320 Speaker 2: dollars the shareholder return of that eleven percent. It's a lot, 71 00:04:01,360 --> 00:04:04,000 Speaker 2: but badge piece of global company, says res men. You 72 00:04:04,000 --> 00:04:06,880 Speaker 2: know we are Tinto's yak of Stousholme's in there. The 73 00:04:06,960 --> 00:04:10,960 Speaker 2: one I think that's really sticks out is Chris Ellison 74 00:04:11,400 --> 00:04:14,520 Speaker 2: at Mineral Resources. Now this is his pay for the 75 00:04:14,560 --> 00:04:20,560 Speaker 2: last financial year and the total shareholder return for Mineral 76 00:04:20,600 --> 00:04:25,400 Speaker 2: Resources in that year was minus twenty four percent, Yet 77 00:04:25,400 --> 00:04:29,440 Speaker 2: he was paid fifteen million dollars now over the five 78 00:04:29,520 --> 00:04:32,640 Speaker 2: years because better be fair here it is actually one 79 00:04:32,640 --> 00:04:34,600 Speaker 2: of the best performing stocks. Is up to thirty three 80 00:04:34,600 --> 00:04:38,160 Speaker 2: percent each year, but last year forty million dollars in 81 00:04:38,200 --> 00:04:41,279 Speaker 2: the ship ice went back for twenty four percent. I 82 00:04:41,279 --> 00:04:43,039 Speaker 2: don't mind making money when they're doing well, but they 83 00:04:43,040 --> 00:04:44,960 Speaker 2: shouldn't be making money when they're not doing well. 84 00:04:45,080 --> 00:04:48,039 Speaker 1: But would part of that perhaps long term bonuses for instance. 85 00:04:48,080 --> 00:04:50,440 Speaker 2: But yeah, I mean this is kind of take home 86 00:04:50,520 --> 00:04:53,040 Speaker 2: pay though this is a realized benefit, so they may 87 00:04:53,279 --> 00:04:55,880 Speaker 2: be bonuses that he's taken home in the year, so 88 00:04:56,600 --> 00:04:58,960 Speaker 2: that is part of it. But there's a lot of 89 00:04:58,960 --> 00:05:00,000 Speaker 2: money for a stock going back. 90 00:05:00,360 --> 00:05:02,760 Speaker 1: Yeah, yeah, it certainly is. And I just still can't 91 00:05:03,000 --> 00:05:05,280 Speaker 1: I can't get over the fact that Matt Common is 92 00:05:05,320 --> 00:05:07,159 Speaker 1: there at number eighteen on the list. 93 00:05:07,440 --> 00:05:09,400 Speaker 2: I'm standing nine million bucks. Don't feel sorry. 94 00:05:09,480 --> 00:05:11,880 Speaker 1: I'm not feeling sorry for him, but I just you 95 00:05:11,960 --> 00:05:14,120 Speaker 1: know what, I just like I just like to win 96 00:05:14,240 --> 00:05:15,760 Speaker 1: and I would like to see him up the top 97 00:05:15,880 --> 00:05:16,440 Speaker 1: of the list. 98 00:05:16,520 --> 00:05:18,880 Speaker 2: I just say, in the top twenty. He is the 99 00:05:18,920 --> 00:05:23,480 Speaker 2: only big bank person in that top twenty, Which. 100 00:05:23,279 --> 00:05:25,680 Speaker 1: Is interesting actually, isn't it, Because you always have this 101 00:05:25,720 --> 00:05:28,839 Speaker 1: perception of the big four bankers being the best paid 102 00:05:28,880 --> 00:05:33,080 Speaker 1: in the country, right the big four CEOs. 103 00:05:31,800 --> 00:05:35,200 Speaker 2: Definitely not and it's not. The banking in Australia is 104 00:05:35,240 --> 00:05:37,760 Speaker 2: a local industry. Look at that some of these top 105 00:05:37,839 --> 00:05:40,840 Speaker 2: so we're talking about Shamara, remember Yak at Macquarie Group 106 00:05:41,040 --> 00:05:44,839 Speaker 2: News Corporation is a bit the same ResMed is definitely 107 00:05:44,839 --> 00:05:47,880 Speaker 2: a global group. The miners fit in their BHP rio. 108 00:05:48,800 --> 00:05:53,760 Speaker 2: When you're in a global market for CEOs and the 109 00:05:53,839 --> 00:05:57,200 Speaker 2: Mike Henry Yuckutt Stouse Home aren't Australian born and bred, 110 00:05:57,800 --> 00:06:00,719 Speaker 2: you know, and they're running the biggest miners, then you 111 00:06:00,760 --> 00:06:02,960 Speaker 2: don't have to pay up for it. I think that's okay. 112 00:06:03,200 --> 00:06:05,200 Speaker 2: But if you're in a banking industry, which is very local, 113 00:06:05,520 --> 00:06:08,920 Speaker 2: you don't. Main Z's just got Matos who has just 114 00:06:09,000 --> 00:06:12,800 Speaker 2: come in. But mostly we've had Australian CEOs there, so 115 00:06:12,839 --> 00:06:14,440 Speaker 2: it's not so much for a global market. 116 00:06:15,200 --> 00:06:18,040 Speaker 1: Massive job, isn't it though? Being a CEO of one 117 00:06:18,080 --> 00:06:21,120 Speaker 1: of these companies, especially when you are something like Commonwealth 118 00:06:21,160 --> 00:06:23,440 Speaker 1: Bank and you have a lot of employees, a big 119 00:06:23,440 --> 00:06:27,080 Speaker 1: Australian employer, it's a big responsibility. 120 00:06:26,520 --> 00:06:31,680 Speaker 2: It is, and they would have to absolutely live these jobs. 121 00:06:32,520 --> 00:06:37,640 Speaker 2: And if you're I'll pick mego nail from Woodside. Woodside 122 00:06:37,839 --> 00:06:42,200 Speaker 2: is always being criticized for its efforts around renewables. I 123 00:06:42,240 --> 00:06:44,960 Speaker 2: think it'd be really hard. Now I don't know her 124 00:06:45,160 --> 00:06:48,040 Speaker 2: and she has to live this every day. I think 125 00:06:48,040 --> 00:06:51,160 Speaker 2: it'll be really hard. Do you think of the supermarket 126 00:06:51,279 --> 00:06:54,679 Speaker 2: CEOs and the former boss of Woolies who quit because 127 00:06:54,680 --> 00:06:55,040 Speaker 2: it just. 128 00:06:54,960 --> 00:06:57,440 Speaker 1: Had enough, you know, Brad Banduci. 129 00:06:57,560 --> 00:07:00,080 Speaker 2: Yeah, and Brad Banducci is a really good CEO in 130 00:07:00,080 --> 00:07:04,080 Speaker 2: many respects. Obviously he had a bit of a blop 131 00:07:04,120 --> 00:07:06,920 Speaker 2: on four corners. Yeah, walked out. That was the end 132 00:07:06,960 --> 00:07:10,240 Speaker 2: of it. But part of me understands that because the 133 00:07:10,240 --> 00:07:11,560 Speaker 2: pressure these people are under. 134 00:07:11,640 --> 00:07:14,600 Speaker 1: Yeah, and they're very public jobs, very public jobs. Though, 135 00:07:14,600 --> 00:07:17,680 Speaker 1: it is good to see the fact that the CEO pay, 136 00:07:17,720 --> 00:07:20,480 Speaker 1: the average CEO pay is now what fifty. 137 00:07:20,160 --> 00:07:23,680 Speaker 2: Five times that the pay of the average worker instead 138 00:07:23,720 --> 00:07:25,840 Speaker 2: of the average worker average worker pay. I don't know 139 00:07:25,840 --> 00:07:28,240 Speaker 2: who the average worker is, but the average worker pay, Yeah, 140 00:07:28,280 --> 00:07:31,200 Speaker 2: fifty five times down from seventy seven times ten years ago. 141 00:07:31,720 --> 00:07:34,800 Speaker 1: It's still a lot, but I mean, seventy seven fields obscene. 142 00:07:34,840 --> 00:07:37,080 Speaker 2: There is I mean, in our interview that we did 143 00:07:37,320 --> 00:07:42,280 Speaker 2: this morning with Ed John from AXI, the trend is 144 00:07:42,320 --> 00:07:45,200 Speaker 2: your friend, Michael. Even when it comes to a muneration pay, 145 00:07:45,560 --> 00:07:47,640 Speaker 2: so you know, the cost of getting rid of someone 146 00:07:48,160 --> 00:07:52,600 Speaker 2: is less. The disparity between the average worker rate and 147 00:07:53,080 --> 00:07:57,520 Speaker 2: CEO pay is kind of less. The even the disparity 148 00:07:57,560 --> 00:07:59,520 Speaker 2: between the top and the bottom companies, it is less. 149 00:07:59,520 --> 00:08:00,960 Speaker 2: I don't know the it's good or bad thing that one, 150 00:08:01,200 --> 00:08:03,160 Speaker 2: but we're kind of heading in the right direction. 151 00:08:03,400 --> 00:08:05,200 Speaker 1: Yeah, and look, this is probably the kind of thing 152 00:08:05,240 --> 00:08:07,560 Speaker 1: that you're going to have an opinion on, right And 153 00:08:07,600 --> 00:08:10,320 Speaker 1: if you do actually have have a comment an opinion 154 00:08:10,360 --> 00:08:12,400 Speaker 1: on this, get in touch, send us a note via 155 00:08:12,400 --> 00:08:14,120 Speaker 1: the website, go to Fear and Greed dot com dot 156 00:08:14,160 --> 00:08:15,640 Speaker 1: au and let us know what you think, or any 157 00:08:15,680 --> 00:08:18,000 Speaker 1: of the social media platforms, because this is one that 158 00:08:18,040 --> 00:08:20,880 Speaker 1: should probably think that I've said something that is completely ridiculous. 159 00:08:20,920 --> 00:08:23,840 Speaker 1: You will disagree and think that Matt Common doesn't need 160 00:08:23,880 --> 00:08:25,880 Speaker 1: to be anywhere near the top ten for instance. Yeah, 161 00:08:26,040 --> 00:08:27,920 Speaker 1: but I mean, get in touch. We would love to 162 00:08:27,920 --> 00:08:29,600 Speaker 1: hear from you. Likewise, if you've got a question that 163 00:08:29,640 --> 00:08:32,080 Speaker 1: you would like us to tackle on, ask Fear and Greed. 164 00:08:32,360 --> 00:08:34,520 Speaker 2: Thank you, Sean, thank you, Michael Thompson. 165 00:08:34,600 --> 00:08:36,160 Speaker 1: And this was Ask Fear and Greed.