Get them out. They are milking us!
A 20% increase in board and executive remuneration in just one year
The real problem at CPA Australia - leadership
Lets not pussyfoot around the issues any longer.
I suggest all these issues that I (and I’m sure others also if the response I am getting is any indicator) have been raising in these group emails (10 to date) touch on the heart of the problem at CPA.
There are many issues which resonate with the members, and which the group emails have fleetingly covered.
Remuneration: Obscene levels of remuneration to the Board and Senior Executives with a defiant one finger salute from the Board to anyone who dares to ask for more detail.
Corporate Governance: A corporate governance model which has such major weaknesses that the members do not even vote for the board and the Boards response is another one finger salute of legal mumbo-jumbo defending the status quo.
Marketing and branding: A strategy that focusses so much on Alex Malley and global growth it has lost sight of the organisations reason for existence - to enhance the profession and serve the members. The Boards response is but we are growing and Alex Malleys photo is everywhere. Need I say more. It basically is making the accounting profession a laughing stock.
Censorious culture organisationally: An organisation that basically is you either accept the Malley way or you can hit the highway. In other words the Board is saying we will not accept criticism nor allow freedom of speech between members. A one finger salute with a big ‘get stuffed’ imprimatur.
I’m sure there are others.
Members can express these issues in different ways but at is heart what really is the problem.
Well I suggest it can be summarised in a few brief sentences and this is how I would do it - not comprehensive mind you but trying to hit the real issue.
It is a leadership problem - loss of integrity and credibility.
To me our leaders at Board and Senior management level (our Key Management Personnel in effect) have little integrity and have lost their credibility.
Let me summarise that by saying integrity is not something you achieve by words, it is something that you earn from your actions.
Legal management speak responses which say 'but we are doing everything according to the book’ (their long memo yesterday is a classic example) is their way of avoiding the real issues.
Most members have little interest or time to get involved in correcting these matters, and just presume it is being led well.
I believe we as members are wrong in that presumption.
I regard the remuneration of key management personnel as the litmus test of their integrity and credibility.
CPA Australia is a very low risk organisation (almost guaranteed revenue each year from members dues) yet the board and senior executive are milking it as if it is a high risk company.
The board and senior management (and they are detailed below so let’s not lose sight of the individuals behind those group terms) are being remunerated at the level of some of Australia’s largest companies, and they refuse to disclose how much each of the 15 (3 senior executives and 12 board members) people receive individually.
Let me say it again.
They REFUSE, just bluntly refuse to tell us what the Key Management Personnel earn individually.
And it has increased by 20% from 2015 to 2016. This is obscene.
The obvious danger and (do I need to hit the board over the heed with a bit of '4 be 2' for it to sink in) is that this select group of individuals are virtually unaccountable to anyone but themselves for their remuneration.
Read that again to catch the gravity of what I am saying.
Then have a read of the section below on Remuneration, and come back and read it again.
Yes, it stinks.
Now go just below and read of who some of the specific beneficiaries of this are and the close past connections of some from Macquarie University days, then come back and read it again.
Yes, it is looking pretty rotten.
Now ask yourself why don't they just disclose what they are getting?
Now that is a great question.
Their refusal speaks volumes.
CPA Australia is a cash cow, and many in the leadership of the organisation have lost sight of why the organisation exists, and are gaining enormous personal benefit for themselves out of all proportion to their the membership, the organisation, and the work they do.
Linked in with that is
the length of service of certain select directors beyond the normal nine year maximum (here I am specifically referring to Petty, Wade and Ryan)
( see attached chart)
the influence of a small number of long serving directors over the all powerful Nominations and Remuneration Committee (Ryan and Petty have been on it almost all their years on the board, with Petty as Chairman since 2009, and Wade now taking over as Chairman) (see attached chart)
a note of concern regarding CPA Australia Advice including most of these long serving persons (Wade, Petty, Malley) and our current President (Carlin) and the two COO’s (Hughes and Awty) with additional remuneration to what they are now receiving from CPA Australia as Key Management Personnel.
Let me quote from Jeff Hughes latest memo (16th March)
"To cement that, we have four directors of CPA Australia Advice who are also directors of CPA Australia. The chief executive and two chief operating officers of CPA Australia also hold these roles with CPA Australia Advice. The remuneration framework associated with these roles is consistent with the risk profile of a company holding an AFSL and an ACL.”
That quote is ringing alarm bells in my head saying ‘how much more do these guys want to milk out of us’.
Let me put that another way, the annual report last year said that CPA Australia Advice is a long term strategy that ’may result in the Consolidated Entity returning a deficit in the future”.
Behind the legal management speak they are saying CPA Australia Advice is going to lose money but CPA Australia will pick up the shortfall. What they didn’t say then but we know is happening because Jeff Hughes told us in his memo yesterday and quoted just above, is that 4 current directors of CPA (including Wade, Petty and Carlin) and the three senior executives (Malley, Hughes and Awty) are also being remunerated by CPA Australia Advice in addition to their already obscene levels of remuneration from CPA Australia.
That is ringing so many alarm bells in my head I’m surprised members cannot hear them from where they are.
Is CPA Australia just a cash cow for these specific individuals to reap enormous remuneration and not be accountable to anyone but themselves (have another look at the chart of the composition of the Nominations and Remuneration Committe if you want to see that)?
a note of concern regarding the close connection of our current CEO (Malley), Director (Petty) and President (Carlin) and a number of other CPA management staff from their time at Macquarie University in 2006. I add there is nothing necessarily wrong with this but within the context of the gross remuneration being paid to KMP, and the blank refusal of the Board to disclose what individual key Management Personnel are receiving, it is a concern.
What happened at Macquarie University in 2006 to forge such strong bonds now at CPA Australia?
Alex Malley (CEO), Richard Petty (director for 11 years), Tyrone Carlin (President), Anthony Matis (GM-Bus Dev’t Education International), Jillian Bowen (Content and Social Media Manager, The Naked CEO), and who knows who else.
Whatever it was CPA Australia is very handsomely rewarding these individuals now. Did members see the AFR article by Bryce Corbett on Jillian Bowens overseas travel on CPA Australia’s slate. (2nd March 2017) It is included in email 5.
And let me emphasise that there is nothing necessarily wrong with these close past connections, but in the context of where CPA Australia refuse to disclose the individual amounts paid to these people who occupy, and have occupied for some time, senior leadership positions at CPA Australia, it is cause for concern.
Our organisation needs to be above reproach on these matters. And seen to be so. Their refusal to provide full disclosure of individual remuneration of Key Management Personnel just makes the alarm bells ring even louder.
their contention that the KMP remuneration is subject to scrutiny at the AGM is pure fantasy. That sounds very open and transparent but really do you think more is going to be said at the AGM to what you have said in your two memos, and you know you refuse to provide individual details. That is just management 'patting yourself on the back’ gobbledygook for saying nothing.
There are three things that the Board could easily do to resolve all these questions very quickly and easily, and it is what all public listed companies do in Australia because of the very real dangers that CPA Australia faces on these matters
1. Disclose what CPA Australia is individually paying the current CEO (Malley), COO’s (Hughes and Awty) and 12 directors (Wade, Carlin, Petty, Dolin, Alston, Portelli, Ryan, Dickson, Ong, Hourigan, Lang, Spong)
2. Disclose what CPA Australia Advice is individually paying the current CEO (Malley), COO’s (Hughes and Awty) and four directors (Wade, Carlin, Petty and Dolin)
3. Disclose these details for the last five years as well as currently.
This is what we ask to the Board.
Why do you refuse to disclose these details?
I would encourage them each, especially the 'newer’ ones, that this is not a question of Board loyalty or we need to support our senior management.
This is a question of your fiduciary duty as board members to the CPA Australia organisation and to the members.
I’m sure most of you will have done the AICD course, and have had considerable experience in these matters.
Many CPA members also ‘fit that bill’. You are not alone in that regard.
Don’t believe the ‘crap’ that directors need to serve beyond the 9 years because they have an expertise that we cannot easily find in the CPA membership.
That is just your ego’s having a brain fade.
The Corporations Act is pretty clear on your duties and responsibilities.
It’s worth having a quick reread of s.180 to s.184 (as I just did) to refresh, and could I encourage you to reread them before you answer the above question.
Your responsibility is to the members and the organisation, not to the management, and certainly not to past decisions and mistakes.
There must be a saying somewhere that says you can a piece of crap a gold nugget but no matter what you call it, it is still a piece of crap.
I am not too sure how you view these group emails and the issues that they have exposed but I would encourage you to cast a wider net for getting the members views than some of the Key Management Personnel listed above and the concerns mentioned.
I think the hesitation you have is that board solidarity is a strong influence but underneath I think if these individual remuneration amounts were disclosed the members would be screaming much louder in protest than I am at their exorbitant levels.
I can’t see why the hesitation to disclose even the CEO’s salary.
To not disclose that is almost a tacit admission of cover-up.
Yes, yes, we know you are not bound to by the law. But ask yourself what do all the members think should be done?
Yes, exactly right.
How about doing the right thing I suggest.
You also will know that we have collected 93 signatures (to the last hour anyway) in just four days on a Special Members Resolution to reduce the maximum directors fees by 50%. I reckon we will hit the 100 by the weekend.
Now I’m sure you are thinking yes,
but the members have been misled by my emails because we are not paid the maximum (have a read below on that one), or perhaps
there is no way the resolution will pass as it has to get a 75% favourable vote at a members meeting ( and we have made that possibility much harder by moving he AGM to Singapore),
the signatories are probably from some constant complainers and whingers so we are best if they leave (let me assure you, that would be a completely false conclusion and that if you think that you have lost contact with the 'beating heart' of the membership)
but this guy is just a little unknown accountant from (where was it now.. oh yes) Armidale, how could he possibly have the expertise an experience we have. He must be wrong.( you well maybe be correct on that one but we shall see. I may not be on the side of the angels, but I’m a heck of a lot closer to them than you are on this issue).
Alex and his two COO’s (Jeff and Adam), and Tyrone,Graeme and Richard have assured us that we just need to tough it out, the members will lose interest (maybe so, but think about that a bit, is that a good reason really).
etc who knows what you are thinking.
Can I suggest to you that you should do a little bit of extrapolation from what has occurred.
From a mailing list of about 600 'unknown to me'members only 8 have unsubscribed.
Over 160 (and growing by the minute literally) have sent emails of support and 'good on you, we agree' sort of thing , and as I say 93 so far have signed a members resolution to reduce your fees by 50%.
I don't profess to be a marketing analyst but I think even you would have to agree that perhaps you are believing the spin of Alex Malley and Graeme Wade a little it too much.
To be brutally frank I read the detailed Memo from Jeff Hughes late last night and I thought the Board and Senior Management must be living on a different planet.
You are not trying to deal with the issues, you are just trying to justify some major and basic errors that have permeated our organisation.
I know it raises difficult issues when you are dealing with leadership, especially with some who are very much ‘out there’, but as they say 'cometh the hour, cometh the man/woman’.
That is one of your most important tasks as board members.
It is not to hightail it to Singapore for the AGM, it is rather to face the music.
And the vast majority of the members know it.
Do you think I exaggerate?
Well why not send out an email to members and ask them if they believe CPA Australia should provide the answers to the above three questions on Key Management Personnel remuneration?
(I can hear, and almost tell you who, is grumbling in the background saying there is no way we can do that).
I say to you Board members why not?
And your answer to that is the reason why CPA Australia has significant problems at a leadership level in terms of integrity and credibility.
Lets just have another look at the issue of outrageous remuneration for the directors and senior executives which has been publicly exposed and focussed on Based on 2015 report but the 2016 report is even worse)
Look at Note 18 on page 89 of 2016 Annual Report
Key Management Personnel remuneration has increased by 20%.
This is obscene.
Senior Executive Remuneration
The three senior executives (Alex Malley, Jeff Hughes and Adam Awty) received at least $2,900,000 between them in 2015.
Note that is the minimum they received.
That's an outrageous average of $966,000 each.
In todays AFR you will read that the CEO of CAANZ’s salary is a pretty high $600,000 plus a bonus.
But that pales into insignificance compared to what CPA pay its senior executives all three of them.
What salary is Alex Malley actually receiving?
This is not just an issue this is a disgrace.
If you thought the above senior executives were on a good wicket just have a look a the 12 directors.
They certainly were not going to be outdone.
For 11 meetings a year they receive a maximum of $1,640,000.
If the maximum is not paid then the difference goes to the three senior executives. Nice little tight circle of excess I call it.
And how is that maximum split up? In other words who gets how much?
Well king of the pile is the President (currently Tyrone Carlin but back then Graeme Wade on $402,000, and he had the privilege of being President for two years).
I hear you say but surely you mean $42,000. NO, it was $402,000. (Of course that is now $420,000 in 2017 for Tyrone Carlin).
The Deputy Presidents (2 of them usually) received $167,000, and the other nine directors each pocketed $100,000.
Can you see why there is little complaint from the Board to listen to members queries about these outrageous remuneration levels.
To illustrate how lucrative it can to be a director of CPA Australia lets take Graeme Wade as an example (yes, we will get onto his being Chairman of the NBL which CPA sponsors later on, one thing at a time). If the maximum directors fees have been paid (and we have no reason to believe they haven't going by the last time they told us) then in just 7 years he has been paid over $1,500,000 in directors fees. You can work out the average yourself.
Richard Petty has managed over $1,100,000 over nine years.
But I would suggest the one to watch is the current chairman Tyrone Carlin - over $500,000 in just three years ($700,000 if you look over 6 years) and 2017 presidents fee not counted in that. All this for just 11 meetings a year. Oh come on, the President must do more than that. Perhaps he does but does he do $400,000 plus more? Given he already holds a pretty responsible job as Deputy V-C at Sydney Uni., I’m surprised he has the time. But I’m not privy to the expectations of senior management at Sydney Uni., so I shall leave that for others better able to determine that one.
Well members do you think our directors are being over-remunerated?
I think these levels of remuneration are outrageous and obscene for a member based professional organisation.
And ditto for the senior management.
So what can we do about it?
Members Special Resolution to reduce directors fees by 50%
This is where we can make a difference.
We need 100 members to sign it to force the Board to bring it to a vote at a Members Meeting.
I should add that is just out of a mailing list of 600 members. Can you imagine the response if all the members knew abut this?
Well see below on what and how CPA Australia (and by that I mean the Board, the senior management and the CPA staff) have done.
But the more the merrier I say because it gives a very strong and clear message to the Board, the CPA staff, the rest of the CPA membership and just as importantly to the watching world.
We already have 96 members who have signed it.(and they have been pouring in over the last two days)
So if you agree then please sign and return it to me asap. It is attached.
See my special section in the last email on confidentiality and the non-answer provided by our Company Secretary and very well remunerated COO Adam Awty.
My shorthand summary is disgraceful but have a read yourself and see what you think.
Please note that I will not be disclosing the names of members who signed the resolutions to anyone at CPA Australia.
It will be done to an objective third party because of the conflict of interest with the Company Secretary and quite frankly I do not trust them.
Apologies for the rush of this.
Detailed Analysis of the Annual Report and the Memo from the Board when I get a chance
Others might like to do the same - I’m happy to spread it around.
Thanks to all members who have sent in resolutions.
A bit too hectic at moment to reply individually so please accept my apologies, and thanks, and I hope to get back to you all some time soon.
Have a read of the two Rear Window Articles in the AFR today. I'll send through later ion if I get the chance.
AGM in Singapore? How far are they hoping to run to avoid the issues.
Brett Stevenson CPA BComm MDiv
|Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594|
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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Email 11: 17thMarch2017. Get them out. They are milking us. The Real Problem at CPA Australia - Leadership
Group emails on issues of concern sent to our mailing list
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