Taking the Piss-Part 2

After resigning last Friday, Frank Cicutto walked away from his less than average performance as head of the National Bank with a total payout of $14 million, including a cash bonus of $1.3 million, options worth $4.5 million and amazingly, a broken contract fee of $3.3 million for the contract he obviously broke. Meanwhile, global monster ExxonMobil, that in a recent report was shown to be responsible for 5 per cent of global-warming emissions and countless injustices in the third world, has reported the highest profit in corporate history- US$17 billion.

NEWS REVIEW

Bank chief quits with $14m

Frank Cicutto, who rose from branch employee to be National Australia Bank's chief executive, has resigned over the $360 million foreign exchange trading scandal and walked away with a $14 million payout.

Full story: http://www.theage.com.au/text/articles/2004/02/02/1075570360335.html

Bonus amid rogue trading boosts payment

Former National Australia Bank chief executive Frank Cicutto will collect a $1.3 million cash bonus for performance last year, despite an admission that unauthorised trading occurred in 2003.

Full story: http://www.theage.com.au/text/articles/2004/02/02/1075570360224.html

Explaining the Cicutto payout

Terry McCrann clearly advised the Herald Sun bosses to only go with the $7 million figure for Frank Cicutto in Tuesday's paper so today he was busy justifying his argument and getting stuck into "the 'quality' Fairfax duo in Melbourne and Sydney" for using a figure of $14 million.

Full story: http://www.crikey.com.au/business/2004/02/04-0002.html

Former candidate sues 14 directors

Nine current NRMA Ltd directors and five former board members, plus chairman Ross Turnbull, have been drawn into a court action mounted by Tim Shelton, an NRMA member and candidate at last November's election.

Full story: http://www.smh.com.au/articles/2004/02/04/1075853940775.html

'Early access' scam hits poor

The Tax Office and the Australian Securities and Investments Commission have warned members of superannuation funds to reject offers from promoters offering pre-retirement access to super benefits.

Full story: http://www.smh.com.au/text/articles/2004/02/03/1075776058736.html

Hold the presses, forever

NEWSPAPER group John Fairfax Holdings hopes to avoid industrial action in Victoria after it yesterday axed 86 printing jobs as it announced the closure of its Spencer St printing plant after more than 30 years.

Full story: http://www.theaustralian.news.com.au/common/story_page/0,5744,8578674%255E643,00.html

ACCC calls Telstra over '$0 mobile' ads

The Australian Competition and Consumer Commission is seeking Federal Court declarations that Telstra's aggressive advertising of a "$0 mobile telephone handset" - that in fact tied the consumer to a two-year contract - is misleading and deceptive.

Full story: http://www.smh.com.au/text/articles/2004/02/02/1075570362881.html

Court rules against Elliott over $1.4m

John Elliott's day of reckoning has drawn dramatically closer after the Federal Magistrates Court on Friday rejected one leg of his request to fend off a demand for $1.4 million, a payment that could send him broke.

Full story: http://www.smh.com.au/text/articles/2004/01/30/1075340845432.html

Biggest profit in corporate history lifts Exxon morale

ExxonMobil, the world's biggest stock-listed oil group, cleared some of the pessimism surrounding its business by unveiling $US17 billion ($A22.3 billion) annual profit - the biggest in corporate history.

Full story: http://www.theage.com.au/text/articles/2004/01/30/1075340842296.html

Parmalat simply sent its invoices out twice

Parmalat Finanziaria, the bankrupt Italian food company, received about €4 billion ($6.5 billion) in loans from banks by allegedly double invoicing for its dairy products, according to court documents.

Full story: http://www.smh.com.au/text/articles/2004/02/02/1075570362802.html

NEWS HIGHLIGHT

Company bosses discover it's getting harder to stay on top of the game

By James Chessell of the Age.

Frank Cicutto yesterday joined a growing number of Australian chief executives who have parted ways with their boards in recent years under what could politely be described as a cloud.

Southcorp's Keith Lambert, Brambles's Sir CK Chow, Billabong's Matthew Perrin, Air New Zealand's Gary Toomey and AMP's Paul Batchelor are just a few examples of how life at the top can end very quickly when investors become very unhappy.

"Shareholders have found their voice in recent years when it comes to expressing their views and companies can ignore them at their own peril," said Matrix Asset Management's Brian Ingham.

"They are demanding more of management and the board rather than relying on the 'old club' mentality when a pat on the back would do."

Mr Cicutto's "resignation" is regarded by many as yet another example of shareholder unrest at a time when tolerance for bad surprises and poor performance is diminishing.

A recent survey by consultants Booz Allen Hamilton found the average Australian chief executive lasted 4.4 years in the top job, well below the six-year average in 2001 and global average of 8.6 years.

About 30 per cent of CEOs who went out through the revolving door went for performance-related reasons, with half of those leaving because of "failed endeavours to manage offshore acquisitions".

The study concluded that local CEOs have a "two-year window" to deliver the goods before their tenure is at risk.

The market's newfound impatience has been put down to several factors. Mr Ingham suggests the rise of the funds management industry means "there are more active managers and any negative surprise gets very harshly treated".

Perpetual Investments's John Sevior says it may be a reaction to previous, more cavalier, investing habits.

"We've come out of a major tech boom and that always causes dislocation and problems so maybe you've got to look at all this in terms of that environment," he said.

But while the market likes to reward steady growth there is little room for error for executives with a long-term strategy.

"Clients want returns faster, so investors push companies faster. I don't know in all cases if it's for the better - it often causes excessive short-term over-reaction," Mr Sevior said.

The Booz Allen study found "the first 100 days are even more crucial" for CEOs "when mapping out their strategy".

Boards are also thought to be playing a more aggressive role when it comes to dealing with underperforming executives.

Australian Shareholders Association deputy chairman Stephen Matthews suggested a growing level of "institutional and retail shareholder activism" had led to a "new generation of non-executive directors who have come through that are too smart to get painted into a corner".

SATIRE

10 useful expressions for those HIGH STRESS days at work...

1. Did the aliens forget to remove your anal probe?

2. Errors have been made. Others will be blamed.

3. Let me show you how the guards used to do it.

4. And your crybaby whiny-assed opinion would be...?

5. I'm not crazy, I've just been in a very bad mood for 30 years.

6. Sarcasm is just one more service we offer.

7. Do they ever shut up on your planet?

8. I'm just working here till a good fast-food job opens up.

9. I'm trying to imagine you with a personality.

10. A cubicle is just a padded cell without a door.

For further information

Contact:   Chris Owen
Email:   c.owen@labor.org.au