When it was revealed recently that now former Australia Post managing director, Ahmed Fahour, took home $5.6 million last financial year – a salary more than 10 times that of Prime Minister Malcolm Turnbull – it understandably sparked a furore over inflated executive salaries. The gap between rich and poor is expanding to obscene levels.
When executives are paid the big bucks; average workers are outraged. Given the average pay for those at the top of the corporate ladder is now more than 50 times the average Australian salary – and 30 per cent of companies paid no corporate tax in 2013-14 – it is easy to see why the situation is mind-boggling for most people.
Not all CEO salaries are created equal
When you drill down beyond the headlines and hype, what presses buttons about sky-high CEO salaries is income inequity – the disparity between the upper and lower ends of the pay scale. It is important to note not all CEO salaries are created equal. There is a contrast between salaries of not-for-profit-sector CEOs, corporates and senior-level public servants.
Just a few years ago, a survey found the role of CEO in an Australian NFP can expect to receive on average between $125,000 up to $149,330 (including incentives). Compare this with the highest paid CEO, Macquarie Bank’s chief executive Nicholas Moore, who topped the corporate list this year with a pay packet of more than $18 million.
Coalition senator, backbencher Ian Macdonald, didn’t win the sympathy vote from the public in February, when he defended politicians’ perks, including the Life Gold Pass. With a salary of $200,000 – two-and-a-half times the average Australian wage – his remarks went down like a lead balloon, and triggered lively online commentary.
There is no place for entitlement
Think Bill Gates. Think Mark Zuckerberg. Two big names in global business who are using their status and personal wealth to support good causes – and are they literally changing the world. These are extreme examples. But is it unreasonable to expect CEOs, who are earning staggering incomes, to donate to causes that will have a positive impact?
As an executive coach, who works closely with senior leaders in business, NFP and the public service, I find most are driven more by values than a pay packet. It is heartening to have amazingly talented, senior people come to me looking for ways to give back – they don’t want to be relegated to an ivory tower, they want to make a meaningful contribution.
Being a leader is hard – there is no doubt about it. But it is also a privilege. From this position of privilege, there is scope to make a difference outside of the boardroom.
Consider how much the top 200 ASX CEOs earn – and let me know how you feel about it.