CBA Chief Norris May Receive Multi Million Dollar Pay Raise

Post by NeilMc on October 5, 2009 · Under Australian Economy, Business News, Company News, banking · Comment

Commonwealth Bank of Australia (CBA) chief Ralph Norris may receive a pay raise of as much as a $7.8 million increase in his pay check in the following years, despite outrage over executive pay and bank bonuses by society at large, and efforts by policy makers globally to limit executive compensation.

The revelation was made immediately following a report by a government task force which suggested that high levels of executive compensation were fuelling community concerns that executive pay was spiralling out of control.

CBA revealed the information as part of a notice it gave for its upcoming AGM.

Under the new compensation plan, Mr. Norris will receive $4.49 million worth of CBA shares, with the plan including a provision for a further $3.37 million to be used as incentive.

In order for Mr. Norris to be able to qualify for the increase, CBA will have to meet strict performance targets.

According to the Australian Council of Superannuation Investors, Mr. Norris’s pay in 2008 was $8,662,920.

Despite making the admission that some CEO’s make more than 150 times the average salary, the Productivity Commission rejected calls for executive compensation to be regulated and capped.

The Productivity Commission in its draft recommendation said that capping executive pay would not achieve the desired result and would result in “perverse economic consequences”

After the release of the Productivity Commission Report, Mr. Norris argued that a one size fits all approach towards executive pay would be ineffectual and said he disagreed with a salary cap.

According to the Productivity Commission, executive pay has leaped 250 per cent in real terms since 1993. However the Commission found large disparities between compensation at small and large companies.

The average salary for a CEO running one of the largest twenty companies is $10 million, or 150 times the average weekly salary. CEO’s running smaller companies average an annual income of $200,000 or three times the average weekly wage.

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