News.com.au has a story on the multi-million dollar pay rises given to some of the execs at Macquarie Bank recently:
The bank's chief executive, Allan Moss, now pockets $18.5million - a $6million hike on the previous year - and executive Nicholas Moore takes home $18.2million, up from $11.4million, while property chief Bill Moss is paid $15.5million - a handsome $10million pay rise.
$18.5 million dollars… Damn, that's a lot of money. I'm sure these people worked hard to get where they are, and continue to work hard, but is anyone really worth $18.5 million dollars a year? (Or even US$32 million, the amount the CEO of Merrill Lynch gets paid.) I don't have any information on what these people do with their money, but I'd suspect it would be to expand their property investments, buy a new Mercedes E-class, oh, and maybe a BMW 7-series too - basically, spend it on themselves.
I'm all for making money, living comfortably, etc, but in my view, that amount of money is just excessive (yes, I know there are plenty of people that earn much, much more). If you're spending $9 million a year (when you take out taxes) to live, then there's something seriously wrong with your lifestyle. Even if you're not spending it, what's the point of keeping it in properties/shares/trusts, when it could do so much more for plenty of other people that don't have homes and can't feed themselves? Calling in the poverty line may be cliche, but it's true. You have a handful of people earning absolutely obscene amounts of money (which most of us will never, ever earn in our entire lifetimes), and a whole, absolutely frickin' huge mass of people living below the "poverty line" - some without running water and electricity!
Why don't these people (or the companies paying out these amounts of money) sacrifice even a small percentage of their pay to help others out? With a profit of $823 million, spending $1 million isn't exactly going to hurt the company. I bet the feeling of helping someone (let alone a community) out, by feeding them, educating them, or even building infrastructure far outweighs the cheap (and short) thrill they might get from buying that brand new Mercedes or house in Rose Bay.
It's sad, really.
“While Macquarie pays its 6556 staff an average of $296,674 a year, Babcock pays its 450 employees $457,000.”
Gotta love the law of averages, the averages must be high if your GM is earning 800 Mill (seriously) and the top 7 execs are earning 90 mill
Which company are you referring to?
“Why don’t these people (or the companies paying out these amounts of money) sacrifice even a small percentage of their pay to help others out?”
Although it isn’t well-publicised, Macquarie actually has a very large and active charitable arm called the Macquarie Foundation. Even though I wasn’t directly involved in their work, from reading many monthly newsletters (which they distribute to all staff), it seems a well-established fund supporting many worthy causes. For donations made by staff to this and other nominated charities, Macquarie matches it dollar-for-dollar.
You can find more about it at the link below. The annual report PDF on the right is probably the most interesting.
http://www.macquarie.com.au/au/about_macquarie/macquarie_in_the_community.htm#
The biggest example of the dollar-for-dollar matching while I was working there was for an Asian Tsunami relief fund:
http://www.macquarie.com.au/au/about_macquarie/media_centre/20050208.htm
Hey Matt,
Thanks for those links - they look interesting. There are, of course, exceptions to the sweeping generalisations I made in the post. The recent donations made by the Bill and Melinda Gates Foundation to find a ‘cure’ for AIDS stand out in my mind.
Feeling a little philanthropic are you Jeremy?
I’m sure it has something to do with capitalism, the selfishness of being human and not being in their shoes.
I dont know what I would do with millions of dollars, obviously in this world, we all exist for our own self gratification (unless you are religious, in which case you exist for the lives/salvation of others). Unfortunately, gluttony does exist and even though what these high-flyers may earn appears to be grossly overvalued in our eyes, in their eyes they have earnt it. But hey when you look at it, do you really think they have a life? I guess it is just payment for sacrificing everything you are.
Think about celebrities, what do they do for the world to deserve the ridiculous amounts of money they earn? 22 million a movie (if you’re a semi somebody) and they complain about piracy!! pfft…
I don’t think arguing whether people “deserve” the money they get paid is a worthwhile discussion.
Taking this argument to its conclusion (”what does person X deserve? who decides?”) you end up with a Marxist society where some structure aims to give everyone essentially the same quality of life. Of course, this is a great idea, but history has proven it doesn’t work.
Rather than trying to enforce and standardise the quality of life (which never seems to work), I think money provides a way for a community to support its own quality of life. Money gets distributed on the basis of how much an individual contributes to the society. If a baker bakes bread for his town, and the townspeople need bread, they will pay him for his goods. He then has a limited supply of his own money to spend on the services or goods which he finds most valuable. This is the basis of capitalism, and I think, the best way of improving everyone’s quality of life that has yet been developed.
Perhaps it’s unfortunate that so much money gets allocated to entertainers and business leaders in our community, but I’d argue that this is a reflection of what our society values. Over time these values change. For example, as of this year, Australian company shareholders can vote on executive pay. This type of rule is important; it reflects a belief that executive pay is only a reflection of their value to the company/shareholders/society, and may need to be adjusted appropriately.
At Macquarie Bank’s AGM this year there was no objection to the pay of these two executives (nor any other). Does this make a difference to your assertions that they are overpaid?