Andrew Leigh

SUPERANNUATION INVESTORS BACK LABOR’S PAY TRANSPARENCY POLICY

Labor welcomes the call by the Australian Council of Superannuation Investors for CEO pay ratio disclosure.

In their newly released roadmap for better corporate accountability, the Australian Council of Superannuation Investors state:

“Companies should be required to disclose the ratio of their CEO’s pay to that of their median Australian worker, and to explain how this is consistent with the company’s values, strategy and culture. This information would benefit a wide range of stakeholders, including workers, the public, investors, government and regulators. Similar measures were recently introduced in the UK and US.”

In October 2018, Labor announced that a Shorten Labor Government would require all listed firms with more than 250 employees to report the ratio of their CEO pay to the pay of the median employee.

This followed research by the Australian Council of Superannuation Investors which found that the average total pay of ASX100 CEOs had risen by 9 per cent last year - four times the speed of average wage growth.

The median ASX100 CEO earned more than $4 million, and the best-paid Australian CEO, Domino’s Don Meij, made an extraordinary $37 million.

Labor’s policy addresses public concern that CEO salaries are growing at an unfair rate and leaving workers behind. By extending current market reporting requirements for public companies, it will help inform investors as they calculate risks and decide where to invest their money.

This is a pro-growth reform and complements other transparency initiatives announced by Labor including the public release of gender pay gaps within firms; our Tax Haven Transparency package; and the annual release of tax data for more large private firms.

The requirement for firms to report the ratio of CEO pay to median worker pay parallels measures introduced in the United States and Britain, with the latter championed by Conservative Prime Minister Teresa May.

Alongside their pay ratio, firms would be encouraged to provide a public explanation of the remuneration strategy.

The measure would apply from the 2021 financial year, to allow the Australian Securities and Investments Commission time to issue appropriate guidance, and for firms to comply with the new requirements.

As well as being supported by the Australian Council of Superannuation Investors, Labor’s policy has also been welcomed by the Australian Shareholders' Association, the Australian Council of Trade Unions, and Domino’s CEO Don Meij.

Tackling inequality requires reform across the board, including in the boardroom.

After six years of Liberal cuts and chaos, our united Labor team is ready.

ENDS

Authorised by Noah Carroll ALP Canberra.