Loopholes

Fairfax CEO Fred Hilmer can just put his feet up and not worry about meeting performance criteria to receive his huge bonus next year. Hilmer paid a premium to gain a put option with Macquarie bank which protects his so-called 'performance incentive' from a fall in share prices. Meanwhile, unless changes are made to close a loophole in family law, people like Jodee Rich could declare themselves bankrupt but continue to live it up in style. Rich's lifestyle is protected after he signed financial agreements to change $5 million worth of property ownership into his wife's name two days AFTER the One.Tel collapse.

WEEK IN REVIEW

Family Court leaves assets in wealthy wife's name

Controversy over high-income earners transferring assets to family members to avoid their debts is set to be reignited after a Family Court ruling.

Full story: http://www.smh.com.au/articles/2003/10/15/1065917483491.html?from=storyrhs

The 42 execs on $3million-plus

Who are the highest paid executives working for companies listed on the Australian market? We now have a stunning 42 executives who walked with more than $3 million in 2002 and 2003.

Full story: http://www.crikey.com.au/business/2003/10/07-0003.html

Hilmer covers Fairfax options

John Fairfax Holdings chief executive Fred Hilmer has admitted to using derivatives to protect his options against falls in the market as he yesterday became a top 50 shareholder in the newspaper publisher.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7800125%255E643,00.html

Cuffe's $31.5m put to the vote

Chris Cuffe, the golden boy of Australian funds management, stands to collect salary and shares worth up to $31.5 million over five years if investors approve a major restructure of the Packer-backed Challenger Financial Group.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,7828404%255E643,00.html

Labor bags cosy loan deal for Cuffe and executives

The Federal Opposition's financial services spokesman, Senator Stephen Conroy, has attacked Chris Cuffe's proposed new salary package at Challenger Financial Services.

http://au.news.yahoo.com//031112/21/mhvo.html

Full story: http://www.smh.com.au/text/articles/2003/11/11/1068329560917.htm

Union to challenge BHP executives' pay

The Construction, Forestry, Mining and Energy Union (CFMEU) will today question BHP Billiton about what it says are "obscene" salary packages offered to the company's top executives.

Full story: http://au.news.yahoo.com//031112/21/mhvo.html

Opponents fail to block IAG chief's pay package

Despite substantial opposition from IAG shareholders to granting chief executive Michael Hawker up to 1.5 million shares over the next three years, the package was approved at the insurer's annual meeting yesterday.

Full story: http://www.theage.com.au/articles/2003/11/12/1068329634481.html

Staff morale worries bosses in theory, not practice

Bosses, according to a new survey, claim that employee morale is a big issue - but the same study's figures suggest most don't have a clue about how to deal with it.

Full story: http://www.theage.com.au/text/articles/2003/11/10/1068329487028.html

New rights for casual workers

CASUAL workers will gain the same rights to contest federal unlawful dismissals -- where they have been sacked on the grounds of sex, race or union membership -- as their permanent colleagues after the Democrats brokered a deal with the Howard Government.

Full story: http://www.careerone.com.au/resources/story/0,8523,7231641-22549,00.html

Sexual harassment still common: report

A new report has found sexual harassment in the workplace is still significant despite it having been outlawed nearly 20 years ago.

Full story: http://au.news.yahoo.com//031112/21/mhcj.html

Primelife kingpin accused of bugging

Sacked Primelife Corp managing director Ted Sent has been reported to the Federal Police over the alleged secret recording of 65,000 telephone conversations of senior executives made over several years.

Full story: http://www.smh.com.au/text/articles/2003/11/06/1068013331490.htm

WATCHDOG NEWS

Jail price-fixers, says Samuel

Australia's new chief competition policeman yesterday backed calls to jail business leaders convicted of serious price-fixing or other blatant cartel activity, saying that would discount the appeal of the profits available from anti-competitive activities.

Full story: http://www.theage.com.au/articles/2003/11/12/1068329631272.html

Exec options rules in 2005

Companies will not have to expense executive options until the new international accounting standards come into force on January 1, 2005.

Full story: http://www.smh.com.au/text/articles/2003/11/06/1068013331160.htm

Watchdogs go hunting in packs

Regulators are busy forging worldwide links to pursue cross-border scams, but globalisation may be moving faster.

Full story: http://www.theage.com.au/text/articles/2003/11/11/1068329557412.htm

NEWS HIGHLIGHT

Failing the test

By Jan Eakin, Sydney Morning Herald.

A comprehensive study of corporate governance at the top 250 listed companies has found that while many talk the talk, few are walking the more stringent standards since the collapse of One.Tel, HIH, Harris Scarfe and US energy giant Enron.

The report, carried out by the University of Newcastle and commissioned by risk management specialists Horwath, concluded that while most big companies appeared to have improved their governance, lesser ranked companies have stood still.

But there were exceptions to the general improvements at the top level. Achieving only one star out of a possible five were high-profile groups Harvey Norman, John Singleton's STW Communications and Sonic Healthcare.

While 15 companies won the top ranking, led by the Commonwealth Bank, some 16 won the wooden spoon.

"Overall, we consider the results somewhat disappointing," the report found. "It may have been presumed that with the very public corporate governance debate that resulted from corporate calamities . . . corporate governance structures and independence levels may have improved.

"It was both puzzling and of concern that the independence levels board of directors and associated committees appear to have deteriorated since the 2002 report."

The report found that the lack of action made the ASX Corporate Governance council guidelines all the more significant.

"General awareness of the issues has improved, with a lot more general commentary, and, of course, the regulators have stepped in," Horwath's head of risk management, Andrew Pearce, said.

"Still, the main debate seems to be why we need greater corporate governance. There's no clear consensus."

Mr Pearce said there was still an argument on why a company such as Harvey Norman, which scored the lowest possible ranking for corporate governance in the report, needed to lift its game when the share price had risen significantly since it listed and full-year profits had grown by roughly 15 per cent a year.

Harvey Norman chairman Gerry Harvey said moves had been made within the company to comply with certain elements of the new regime, but he added: "I don't know why we bother. A remuneration committee is now in place which just tells us we should be getting four times as much as we are getting."

Mr Harvey, a non-independent chairman who intends to remain so, said the lowly score in the report was like "getting one out of five in Latin, but 99 out of 100 in maths".

He said there was too big an emphasis on the new corporate governance environment, but added that he didn't totally disagree with greater disclosure either.

"I've got shares in 50 listed companies myself," he said. "But the most important thing in lots of companies . . . is the people running the business. If they've got the integrity and experience and reputation you don't need corporate governance.

"I've been sitting here for 41 years. I've got shares in Washington H Soul Pattinson because the Millners are there.

"That's the problem with our society, we've got more and more regulation in every particular little area," Mr Harvey said.

SATIRE

More famous insults...

"Thank you for sending me a copy of your book - I'll waste no time reading it."

Moses Hadas

"Next-day delivery in a nanosecond world."

Van Jacobson

"I know of nothing more despicable and pathetic than a man who devotes all of the hours of the waking day to the making of money for money's sake."

John D. Rockefeller

"You look into his eyes, and you get the feeling someone else is driving."

David Letterman

"They never open their mouths without subtracting from the sum of human knowledge."

Thomas Brackett Reed

"Stay with me; I want to be alone."

Joey Adams

"Sharp as a sack full of wet mice."

Foghorn Leghorn

"If he ever had a bright idea it would be beginner's luck."

William Lashner "Veritas"

"He loves nature in spite of what it did to him."

Forrest Tucker

For further information

Contact:   Chris Owen
Email:   c.owen@labor.org.au
WWW:   www.bosswatch.labor.net.au