PM urges rethink on executive payouts

The Prime Minister has weighed into the debate on executive remuneration and excessive pay-outs saying big business must stop rewarding poorly performing managers and start trying to win back public faith. Mr Howard said growing public anger over massive golden handshakes to executives may force the Government to intervene. He appealed to big business to “heal itself”.

Mr Howard did not name any specific companies or executives but said he understood if the average wage-earner, who may make a modest pay increase claim and is told it's excessive, would feel it's unfair if a manager of that company who had performed poorly walked away with a huge pay-out.

The CEO of the Business Council of Australia, Katie Lahey, said the public backlash over large pay-outs was “very understandable”. She claimed big business is listening to the criticism. She agreed that poor performance should not be rewarded but also said that companies must honour contracts and admitted that some contracts are poorly worded. Companies must pay large salaries to attract the best people, she stated.