Fels says executive salaries have soared

The head of an inquiry into executive salaries says pay levels have risen sharply in recent years, but they look set to fall.

Former Australian Competition and Consumer Commission (ACCC) chief Professor Allan
Fels is to oversee a Productivity Commission inquiry into executive remuneration.
The federal government referred the issue to the commission in conjunction with its
crackdown on payments to outgoing company executives.
It will introduce legislation to the parliament to ensure that payments exceeding
one year's base salary must have shareholder approval.
Mr Fels is reluctant to single out executives he believes have received excessive
payouts, but concedes executive pay has soared in Australia.
"It is clear that there has been a sharp increase in executive pay generally in
Australia in recent years," he told Sky News.
"That has tended to be in line with the worldwide price in executive pay. I think
we're now entering into a period where there will probably be cutbacks in executive
pay cheques due to the economic situation."
The public have a right to be angered by bonuses paid to executives of companies who
are not performing well or sacking employees, he added.
"If you have companies performing poorly, if they're also sacking people and then
the executives receive a big bonus, naturally the public gets very concerned about
that," Mr Fels said.
The commission's inquiry will deliver its final report in nine months, but there has
been little detail given about its scope or process.
Mr Fels said he hoped to instil a framework for executive pay, as well as look at
the role institutional shareholders may play in approving executive remuneration.
"I think the inquiry will be useful in that it may point a way to some desirable
principles and criteria for setting levels of executive pay ... and maybe that will
give the institutions some guidance in how they go about their own voting," he said.