Wed "Melbourne Age" 28/8/02
Australia lagging in rewards to CEOs, says Qantas chairman
By Philip Hopkins
August 28 2002
Qantas chairman Margaret Jackson yesterday defended high salaries and option packages for chief executives in Australia, and criticised the level of debate on corporate governance.
"It's a hell of a job. (Chief executives) must be paid a reasonable amount to take on the responsibility and attract the talent," she said.
She also suggested that the Federal Government veto on increased foreign ownership in Qantas meant the airline was focusing sharply on labour costs and their effect on profitability.
On options, Ms Jackson said there were big differences in corporate governance between the United States and Australia.
CEOs or executives in the US received hundreds of millions of dollars worth of options, whereas in Australia it was tens of millions of dollars. "The magnitude is significantly different," she said.
Ms Jackson said that in Australia there were tougher hurdles that did not exist in the US.
"There is not enough discussion of the difference between Australia and the rest of the world," she said. At the moment, the options debate was akin to saying that someone had robbed the bank so everyone should be put in jail.
Arguing the case for a freer share register, Ms Jackson told a Melbourne Press Club lunch at the Windsor Hotel that aviation was a very capital intensive industry, and Qantas' cost of capital would now be 1 to 2 per cent higher because of the government's decision on foreign ownership.
"If labour rates are not competitive, we will not be in a position to compete on fares," she said.