PHOTO: Latitude Financial Services chief executive Ahmed Fahour could make up to $50 million from the company's float. (ABC News: Matt Roberts, file)
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Just as the dust was settling on the latest furore over out of control chief executive pay, a mid-tier lender has taken the largesse to new levels, by Australian standards.
Depending on how you calculate it, Latitude Financial Services boss Ahmed Fahour could make between $40 million to $50 million from the company's planned float.
Rich get richer
Australia's rich keep getting richer, with the top 1 per cent of Australians owning more wealth than the bottom 70 per cent combined.
That's more than 500 times the average wage, at a time when wages growth, and jobs growth, is almost non-existent.
Ten days ago, it was the $24 million salary of Qantas boss, Alan Joyce, hitting the headlines.
Recently departed Macquarie Group chief Nicholas Moore earned a similar amount last year, with Treasury Wine Estates' Michael Clarke the third highest-paid boss, on $19 million.
Highlighting how bonuses are not really bonuses, only one chief executive in the top 100 companies did not get a bonus last year.
But it's the latest announcement from Latitude Financial Services which has again highlighted how chief executive pay operates on a different world to the rest of us.
"Both Ahmed Fahour and Latitude don't seem to have read the tea leaves about the times," shareholder activist, Stephen Mayne, told the ABC.
"It's as if the Hayne royal commission didn't happen, to come up with an excessive salary package like this in a big financial services float."
Among the critics of the huge payouts to chief executives is the Reserve Bank governor.
PHOTO: Carl Rhodes traces the growth in chief executive pay back to the free market economics of the 1980s. (ABC News: Grant Wignall)
Philip Lowe gets just under $1 million and has refused to join the bonus club.
"I can't understand the mindset that says, we have to pay you $5 million, or $10 million, or $20 million, so that you deliver value for the company," Dr Lowe told an audience in Armidale in New South Wales.
"But that's a mindset that many investors have and many people in the business community have.
"It's not a mindset that I share."
'It's over the top'
If all goes to plan at Latitude, Mr Fahour will receive a bonus of $22.5 million.
He'll also get other shares worth $28 million, which he'll have to buy, but he'll be helped by an interest-free loan of $17.5 million.
And then there's his salary, of $4.9 million.
Mr Mayne thinks such over-the-top payments could come at a cost.
"There may be some investors who say 'if the CEOs already got $28 million worth of shares, why should he get a $22 million share bonus?'" he said.
"This is a float I am going to avoid. It's over the top."
Why is wage growth so low?
Why is Australia experiencing its slowest wages growth since World War Two? There are countless theories, but many come back to a shift in power between workers and employers.
Companies keep lavishing astronomical amounts of money on chief executives, despite repeated studies which show huge pay doesn't equal huge performance.
One of those studies, by Morgan Stanley Capital International, looked at hundreds of the biggest companies in the United States over more than a decade.
It found those with the lowest-paid bosses outperformed those with the highest pay by around 40 per cent.
Which raises the question: how did we get to this salary situation which is so out of touch with the real world?
From bland salaries to big bucks
Carl Rhodes, the deputy dean of the School of Business at the University of Technology Sydney, has been studying the issue for many years.
"In years gone by when CEOs weren't paid that much, was is that corporate performance was poorer then than it is now?" he asked.
"Of course not.
"This is part of a historical trend that is self-benefiting to a particular executive class of people."
Professor Rhodes traces the explosion of executive pay back to free marketeers Ronald Reagan and Margaret Thatcher.
The bonuses that aren't
CBA CEO Ian Narev has unwittingly highlighted the farce that is the executive bonus, writes Ian Verrender.
Both were big advocates for the private sector and light regulation.
"We saw a huge wave of corporatisation of organisations that were organised differently before, such as co-ops and mutuals and so forth, and also the privatisation of a lot of public institutions, so the corporation came to be seen as the prime mover in the economy," he explained.
And with that came a big change in the way the role of the chief executive was viewed.
Chief executive pay in the United States rose nearly 900 per cent between 1978 and 2012, a trend that Australia followed.
"You've seen the growth of this type of heroisation of chief executives, which you never saw before," said Professor Rhodes.
"If you go back to the 60s and 70s and before, the businessman was seen as quite a bland, grey-suited character."
With a bland salary to match.
Lower rates, not higher wages
With unemployment looking more likely to rise than fall, don't expect stronger wage growth this year. Expect another rate cut instead.
Something the Reserve Bank governor thinks the business community should heed.
"I'd like to see that mindset be more widespread in the community, with people saying, I don't need these big salaries," said Dr Lowe.
"The attitude should be 'I want to do the job because it's the right thing to do'.
"My incentive is to do a good job for the people I serve."
In an age of almost non-existent wage growth, Dr Lowe has been agitating for some time for bosses to give their workers a pay rise to help the economy.
Professor Rhodes sees that as the solution to chief executive largesse.
Not to drag bosses down but to narrow the wage disparity by lifting those at the bottom.