Bank Execs Deserve High Pays, Says ANZ CEO
Business executives deserve huge pay considering huge responsibilities on their hands and the risks that come with the job.
In effect, CEOs were celebrities too, on their own rights, according to Australia-New Zealand Banking Group (ANZ) chief executive Phil Chronican, but their actions redound on the betterment or detriment of more entities.
Unlike rock stars, movie icons and super athletes, who were accountable to no one, business executives, Chronican said, attached their decisions on the notion of gaining benefits for everyone - for company employees, for investors and for the local economy.
And so it baffles him why the hefty pays given to business bosses generate controversies, with the public readily accusing the executives of taking home too much money.
In a speech before the American Chamber of Commerce in Australia on Wednesday night, the ANZ chief lamented the fact that business chiefs seem to be singled out as targets of unfair criticism when celebrities in fact were being paid more.
Chronican has reported last year that ANZ paid him $2.2 million for running the banking group, ensuring in the process that it remains profitable while attracting the trust of its banking clients.
That amount, he suggested, were peanuts when pitted on the tens of millions of that movie and sport stars rake in, mostly for ribbing the imagination of the public and for remaining relevant as long as possible.
"We seem happy and even proud when our sportspeople make it onto the list of the top 20 paid people, or similarly when our entertainers make it on Hollywood's best paid list," Chronican was quoted by the Australian Associated Press (AAP) as saying.
"Yet for some reason when people are managing large complex businesses it (remuneration) is seen as excessive," he added.
While celebrities and business executives may be enjoying the same amount of cash hauls, Chronican said the public should also understand that CEOs carry more concerns and responsibilities right on their shoulders.
Their decisions and actions must be motivated by ensuring business returns, in order to consistently win the approval of shareholders, while at the same time serve the needs of their employees and customers, Chronican said.
"(But) just like sportspeople and entertainers, senior executives careers do come to abrupt end," which he stressed were one of the few disadvantages that CEOs and celebrities share.
More so, business bosses were mandated by laws for transparency to govern their finances, which Chronican hopes would be extended to other entities.
"Maybe we should look to extend the disclosure to other groups who are in positions of power in their community, including those who are managing public superannuation savings," the ANZ chief said.
Instead of training too much attention on how banks conduct their operations, which has spawned negative images for the sector and the subsequent bank bashings, the public needs to understand that the policy rates being imposed by the country's central banks were not necessarily in synch with funding costs.
"That linkage, if anything, only arose in the early 1990s and persisted in a period of extended stability in financial markets ... and banks let this persist because it was convenient for them," Chronican said.
Also, higher operating costs for banks, he added, were actually due to customer deposits, which in turn compel them to make higher payments.