The Government must do more to control executive remuneration than the Productivity Commission is suggesting, with the potential for damage to affect more than just shareholders, according to the Finance Sector Union (FSU).
In response to Productivity Commission recommendations into executive remuneration, the FSU said the finance sector needs stronger rules than what are being proposed.
“Consumers, businesses and workers are all impacted by how banks work, and deserve more protection than the Productivity Commission recommends,” FSU national secretary Leon Carter said.
The Government must protect consumers and workers from the short-term, high-risk thinking that massive salaries and bonuses fuel, Carter said.
However, he added “simply giving shareholders greater say isn’t good enough, because like executives, shareholders often cash-in on high-risk practices”.
The FSU believes institutional shareholders that control large amounts of bank shares are unlikely to support reductions in executive remuneration in other companies because it would eventually be imposed on their own executives.
