Like many other self-funded "retirees", I took a pretty severe hit during the GFC.
It makes me angry, simply because it was a situation completely out of my personal control, and essentially driven by the behaviour of greedy incompetents on the other side of the world.
And I don't accept any of that Libertarian hogwash that the collapse was caused by government interference. This is a prime example of "blame the victim". If you supervise a process where your institution loans money to someone you know quite well can't pay it back, and your bank snaffles the interest and your employees the bonuses that go with the sales performance, you bear the responsibility of those decisions. If then you bundle up these toxic loans and sell them off, you're responsible - not the government. Isn't "personal responsibility" the catch-cry of the Conservatives? I guess bankers are exempt.
This is either gross incompetence or amoral behaviour. You decide.
It's not the first time in my life, of course, when poor decisions made by powerful and incompetent individuals stateside had a major impact on myself and my family. Yet how soon we forget.
I take severe and personal exception, therefore to the maintenance of a culture where it's considered OK for bankers (and others) to continue to pay themselves obscene salaries even after their incompetence has cost their investors and shareholders a large fortune.
It's not as if this tendency to corruption in the finance industry is anything new.
Take a look at the graph*.
Tt shows a clear correlation between exploding salaries in the finance sector and the collapse of that sector. It's happened before. It's an indication of a sector gone to seed, and becoming corrupt. And yet, we seem prepared to continue to tolerate salaries that are enough per annum to run a fair-sized local authority.
This financial year, the CEO of the Commonwealth Bank (Ralph Norris) received a pay package of $16.2 million, up from $9.2 million last year. Gail Kelly's (CEO of Westpac) pay deal totalled $9.6 million, while ANZ boss Mike Smith received a package worth $10.9 million. Do the sums - total them up - it comes to $36.7 million for three individuals.
You could employ over six hundred teachers with that, or slightly more police.
Of course, we know that you have to pay top dollar to ensure top performance. That worked a treat during the meltdown, didn't it?
The ACTU has put forward a few ideas -
• Capping the base salaries of CEOs at a maximum of 10 times the average earnings of employees within that company.
• Ending the bonus culture that rewards risky short-term behaviour by executives at
the expense of long-term productivity and customer satisfaction.
• Ensuring all employees in an enterprise - not just the CEO - are appropriately
rewarded for their contribution through fair industrial relations laws and practices.
• Taxing companies at a higher rate for paying CEOs more than $1 million and
cracking down on income tax avoidance through trusts and private companies.
• Enabling shareholders to rein in executive salaries and to sue for poor executive performance.
I wouldn't take issue with any of them.
* Source - broadstuff