I tend to think the below quote from Lyn CPA perhaps encapsulates one of the aspects of this whole CPA fiasco that I, and I'm sure many other members, find most offensive. It touches on something that deals with the most fundamental wrong in all of his, which is really an ethical rather than just purely legal question, and I think it reflects something of the way in which the CPA leadership have abused and/or forgotten the high professional standards which we purport to uphold. Let me make just a quick comments on that.
Post by Lyn CPA » Tue Jun 27, 2017 8:32 am
I only want to say as a CPA member, no matter how hard we work with the highest professional standards and integrity, a lot of us won't be able to earn $4.9m for the whole of our working life. It is kind of sad and unfair for someone to rip off our hard earned money in this way!!!
1. I don't think we have a problem with people making money, but we do have a keen sense of needing to work and earn it. Be it based on time and expertise in service provision (as with most professionals) or be it something else (products etc). However with the CPA Australia leadership and management at various levels I think they lost sight of the link of remuneration with work and earning it, and rather thought in terms of the ability to pay (which is what they specifically said in their memos of 2nd March and 16th March) and with some of the absolutely crap benchmarks they used to justify Malleys Remuneration.
To express that more simply they saw CPA as a great big fat cow ready to be milked with no problem being able to pay whatever they wanted, and so they milked it.
They lost all sight of what was a fair and equitable remuneration for effort and work.
Here are some obvious examples of that (and why they refused to make full disclosure of remuneration evennfor board members until they were forced to - which in itself says something)
a. Alex Malleys salary of $1.8m in 2016 and termination payment of $4.9m in 2017. However you want to look at those levels they bear no bearing to work done, performance, market rates etc - disgraceful and greed sum it up pretty well.
b. Adam Awty and Jeff Hughes salaries of $900k + each in 2016, and going back how far who knows. Ditto to above, and they of all people should have known better. To think Adam Awty is now the interim CEO makes me want to puke at the arrogant disdain and one finger salute given by the board to we the members.
c. All the board remuneration levels are an exercise in 'let's pat ourselves on the back and not tell the members'. The opposite of even a semblance of responsible governance with all those fine sounding words like fiduciary duty, and openness and transparency. Jim Dickson reeled off the list of past directors over the last decade as if a hall of fame. To me it was just a listing of directors who really did lose their perspective and I tend more to the view that it was a hall of shame.
A bit hard.
I think not. People should not be directors if they are not prepared to make a stand against groupthink and stand firm against such wanton excess.
Is Mr Dickson going to pay himself at 60% of the auditor generals salary? I suggest the Board start to look at other member organisations and consider what do they pay their Chairman. I suggest they also look at the risk profile of their directors, including the chairman in terms of their statements and public support for many of the issues over which presumably the CEO Alex Malley was sacked, and perhaps of their complicity in that.
The resignation of seven directors including the Chairman, and the sacking of the CEO, with a significantly diminished ruling board in both reputationally and numerical terms, must give pause for thought about why that is the case. Just propping them up with a newly appointed director to make up a quorum is more a move Machiavelli would be proud of than what is expected of a professional membership organisation.
d. What about the seventeen or so middle management staff who are on salaries that would exceed the salaries of the top level staff in most membership organisations. Excess remuneration seems to have developed a life form of its own at CPA Australia.
So, is it any wonder that LynCPA finds it hard to take. I agree with her.
2. Just taking a very basic approach to Remuneration, it would seem that many of the board and staff members at CPA were paid far in excess of not only acceptable community standards but professional ones as well.
Let me take the CEO Alex Malleys salary in 2016. For an organisation with under 500 staff (even less if look at FTE), an annual revenue of $180 million, and a very low risk profile (very solid balance sheet, guaranteed revenue stream each year with membership fees and professional development/education revenue) it managed to pay him $1.8 million.
Let's compare to Ahmed Fahour as CEO of Australia Post with a staff of 32,000 plus, an annual revenue of $6 Billion plus, and a pretty risky company profile. He was paid a very handsome $5.6 million, and the community was outraged and he was terminated as CEO. His replacement is being hired on a salary of $1.3 million (Holgate) and people are saying that is too high.
I'll let you draw your own conclusions but however you want to look at it Alex Malley was being scandalously remunerated by a complicit Nominations and Remunerations Committee, and CPA board who thought they could get away with it as they had in the previous years.
Surely this reflects to a large degree on the calibre of the people who approved these remuneration levels, going who knows how far back. But we shall certainly be publishing a detailed overview of which board members oversaw each year so members can see for themselves that 2016 was not an unusually year and that the complicity of the directors goes back before the current directors.
Am I being too hard, or too personal?
I don't think so.
Too often the term board is used as a sort of scapegoat for the actual individuals who comprise the board. If they are to be remunerated individually and take their duties as individuals as per the law then so should we identify and name them.
3. Methinks that the remuneration levels, contrary to oft quoted ' if you pay peanuts you get monkeys saying, turns that on its head. Especially in an organisation where a small group have held a tight grip on power through various governance strategems.
I think the continued presence, after 11 plus years, of Graeme Wade and Richard Petty on the board, and Adam Awty and Jeff Hughes in senior management plus who knows who else in middle management, indicates a red flag waving vigorously. Yet for the remaining board members (Portelli, Dickson, and Dolin - that latter one surprising given her experiences in WA in 2011) and the new one (Youngberry) it is just business as normal. What is all the fuss?
In such a protected almost monopolistic environment all the normal rules of fair reward for fair days work just fly out the door, and the milking rules start to apply. These start with the 'we pay what the organisation can afford'
then move to 'let's just double it' to
the 'we must never disclose this to the members' to
the 'let's make sure we control the Nominations and Remunerations Committee' to
the 'let's give ourselves a great big pat in the back eh.
So yes LynCPA you have nailed it in a much simpler statement, and I think we all agree with you.