Tax Breaks Won’t Stop Corp. Rip-Offs

Date: 23 October 2002

Skyrocketing executive pay rises would not be stopped by new proposals for a self-regulated salary pause or possible tax breaks for share option schemes, the ACTU said today.

ACTU Secretary Greg Combet said calls by former BHP-Billiton boss Paul Anderson for a voluntary pause in executive pay rises would not stop corporate excesses in the longer term.

"Self regulation is part of the problem of corporate excess, not the solution. Calls for a self-regulated salary pause for CEOs are unlikely to make any real difference," Mr Combet said.

Mr Combet also accused the Federal Government of opening the way for taxpayers to subsidise lucrative executive share option deals, worth on average $10.5 million each for CEOs of Australia's top 150 companies.

Treasurer Peter Costello yesterday told parliament that companies forced to expense executive share option schemes in their accounts could be eligible for a tax deduction when the changes are introduced in 2005.

"It is unjust of the Howard Government to be considering a new tax break on payments to millionaire CEOs when it opposes union claims for modest increases in minimum wages for people earning less than $500 a week.

"The Prime Minister says people have been getting away with murder in terms of corporate excess, but the Government is not doing nearly enough to stop it," Mr Combet said.

Reports this month said senior executive salaries were increasing at four times the rate of average earnings, with top CEOs being paid 30 times the average wage.

Mr Anderson, who left BHP-Billiton with an $18.3 million pay out, last night told a Business Council of Australia dinner that it was time for a voluntary pause in executive pay rises.

Mr Combet said that legislation to improve corporate governance should include:

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