Mary Poppins must have left her umbrella on a train.
Shareholders had thought they had seen it all this week as company boards adroitly shifted the goalposts at Commonwealth Bank and Wesfarmers’ to pay their fat cats millions of dollars more.
Today, however, came the piece de resistance: the big train company QR National tweaked its chief executive’s pay to strip out Cyclone Yasi.
That’s correct: shareholders, citizens, customers – and even the taxman – suffered losses from Cyclone Yasi but the board of QR National has deemed that its precious executives should be shielded from the adverse effects of nature.
Perhaps these directors and their executives really are different from the rest of us. Are they nature’s own?
The QR National remuneration report shows the company changed its earnings hurdles for annual bonuses for 2011 to make them easier to jump following Queensland’s spate of natural disasters. The extreme weather events reduced pre-tax profits for shareholders by $187 million – but not for executives.
Had the floods and cyclone not occurred, QR would have thrashed its prospectus forecasts by 20 per cent. This has been an excellent share market float and subsequent performer. But the question must be asked, would the company have adjusted the original hurdles to reflect the fact that they were too easy? You wouldn’t want to be waiting for that train.
Anyhow, the floods did occur and they had a demonstrable impact on shareholders. Why then, should QR executives (the labour) not share the effect of these extraneous fortunes with the owners of their capital, the shareholders?
Answer: the board appears to be acting in the pecuniary interests of executives, not shareholders to whom the capital actually belongs.
Nor do these enhancements to the executive wicket account for the dramatic rise in other pay enjoyed by the chosen few.
Lance Hockeridge for instance was being paid $943,000 as a public servant but suddenly achieved $1.7 million the next year as a private chief executive … not to mention the $1.664 million cash bonus – a tidy rise of 11 times his 2010 bonus.
The other executives also won millions too, and were also shielded from the impact of natural disasters by these incredible adjustments.
The Queensland Government is still a 33 per cent shareholder in QR National. Is it not a glorious paradox that this champion of the working class is likely to vote its controlling stake today in favour of such a scintillating remuneration lurk?
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.