There is an interesting confluence of stories in today's Courier Mail, which on first glance don't seem to be connected.
On page 9, there's an account of John Mulcahy's departure as CEO of Suncorp. On page 10, an article about self-funded retirees appears. This second one, about government's abandonment of this group in the face of the current financial train wreck, isn't on their website, and I can't link to it, but this earlier story is relevant.
They're linked in my mind.
About six years ago whilst still in harness as a school principal, I was seconded for six months to work in a senior Human Resources position. Our District Director at the time was trying to get field personnel into her office in an attempt at culture change.
One of the less pleasant aspects of this otherwise fascinating job was the responsibility of recommending to the District Director, action to be taken with non-performing teachers. Every now and again, I had to recommend termination (after the completion of a process called Diminished Work Performance) to the DD. Sometimes, it fell to me to break the bad news to the teacher in question. It was really the principal's responsibility, but on occasion it was easier on all concerned, if someone disconnected with the school did this. Once, a teacher for whom I had recommended termination got hold of my home phone number and made life a bit difficult for myself and family for a while. Being phoned at weird hours to be asked "How can you sleep?" wasn't fun. My attempt at wit - "I was doing OK on the sleep issue until the phone rang" went over like a lead balloon.
This made be very familiar with both the consequences and fallout of under performance. The main victims, of course were the kids in these teachers' classses.
Compare this situation with the fate of Mulcahy, CEO of Suncorp, after the value of the company has fallen $12 billion from its peak of $19 billion. According too this report, he's left of his own accord, and has taken with him $20 million pocketed during a six year period. He also holds 1.3 million shares, worth $9.26 million on current share values, and has another 400000 incentive shares worth $2.8 million. His payout figure is $2.4 million.
Why is under-performance
tolerated rewarded in this fashion in private industry? It's interesting to compare this situation to my experience. The cliché that does the rounds in Tory blogs is that the public service doesn't act to manage under-performance. I don't see anyone complaining about merchant bankers in a similar situation on blogs such as Bolt's or Blair's. How is this connected to the story on self-funded retirees?
Obviously, we (I'm one of them) are taking a beating in the current situation. I'm better off than most asset-wise, but it's not fun watching the accumulated rewards of forty-five years of work diminish rapidly (I left school at fifteen and started contributing to super in 1962). It effects my capacity to help my kids, as I'm not prepared to access any of my accounts, and won't until things start to turn. How long this will take is anyone's guess - we're in uncharted territory. I hope I'm still compos mentis enough to enjoy what's left. The job I do because I enjoy it has become useful about now.
It makes my blood boil to understand that smart-arse bankers are handsomely rewarded for making such a mess of their work in providing security for their investors and employees, whilst self-funded retirees are denied the same security through no fault of their own.
But it must be OK – the market rules, after all.