Average CEO salary

Average CEO salary

Here is a startling average CEO salary info graphic from the Australian Council of Superannuation Investors reported in a recent ABC post on CEO pay deals reaching their highest level in 17 years

That’s 11 blokes, and they are all blokes, paid $187 million between them.

An average CEO salary on the list might make the recipient declare $327,000 per week to the tax man.

As is usual on this blog, we’ll try and put these incomprehensible sums of money into context.

A delivery driver for Dominos starts at $15 per hour and might earn as little as $200 per week. That $187 million is roughly 6,309 person years worth of time for money at delivery driver rates working a 38 hour week.

Is the CEO worth the time of 631 people at the bottom end of the staffing pyramid?

A CEO would argue his case with vigor. Decisions, risk, and responsibility are all his and he’ll claim that this comes with an unfair level of stress. Indeed the jobs of all the workers depend on his calls that keep the company stable and trading profitably.

The delivery boy just has to get the pizza to the customer before it goes cold.

Disparity between those making decisions and those following them is nothing new. Throughout history leaders of all hues were in privileged positions that came through the support of their followers. People like being led and they are usually quite grateful for it.

If the leader takes people where they want to go, in the case of Domino’s Pizza Enterprises this was to a 7% profit increase despite lower than expected sales and a 9% loss in the share price, then they are happy and perhaps overlook what that direction might cost. More importantly they might not consider if the cost was worth it or even fair.

Then, of course, it’s a question of who is being led toward happiness. Not that many presumably given that the whole thing is legally designed to generate profit for shareholders who chomp on the profit dividends.

I suspect that average CEO salary will start to smell pretty soon. The majority of people are not led by ASX200 CEOs and they don’t understand why such remuneration levels exist. Indeed, I would be asking questions if I were a shareholder in any of these enterprises. Ironically I probably am without knowing it through the aforementioned superannuation investors.

At some point though, the majority will start to say enough is enough. There was an inkling of this with the Occupy Wall Street movement against wealth inequality, corruption and the influence of corporations on government. Not least the propping up of companies with public funds only for these companies to give bonuses to their executives.

And then that effort faded.

It will surely come again.

And anyway, what’s so special about pizza? What makes Mr Meij worth 33% more than the next highest earning CEO?

Maybe it’s the healthier, tastier menu.

Reputation?

Reputation?

The Australian Broadcasting Corporation, the ABC, holds a reputation. It is a highly respected media source down under, modeled not so loosely on the British Broadcasting Corporation. On taxpayer funds it provides Australians with news, entertainment and community service online, on radio and on TV.

It’s fair dinkum.

No surprise then that the ABC news app uploaded a post providing simple steps people can take to help koalas survive in their area. Just a small but useful morsel of public service information.

Here are the eight headline steps…

  1. Tell people koalas are going extinct
  2. Share social media posts
  3. Protect habitat
  4. Plant koala food trees
  5. Watch out for koalas in trouble
  6. Drive carefully and be vigilant
  7. Contain dogs
  8. Save 24-hour rescue hotline into your mobile

I am not sure what you think about this list.

Have a read of it again.

You may find it helpful and informative just as the ABC online editor no doubt hoped. Perhaps you are a fan of the furry and cute koala, so iconically Australian that stuffed toy versions outsell kangaroos in airport departure lounge shops.

But have you seen one in the wild?

Probably not. So the logic leap is that they are rare and, as the list tells us, going extinct. No doubt they need protection.

But there is a problem.

There is no evidence that koalas are going extinct. We don’t even know exactly how many there are in the wild so it’s impossible to know if the numbers are changing towards an extinction risk.

We do know that this species is widespread, cosmopolitan and does very well in favourable habitat containing younger woody plants. It can do so well that some local populations grow rapidly and become overabundant. We also know that the habitat koalas like exist in both agricultural and natural landscapes from Townsville to Mount Gambier, a latitudinal range of nearly 3,000 km.

We also know that when we have a good way to find them, sniffer dogs ironically, they pop up everywhere, often in places where they were either not known or have not been seen for a long time.

Folks, this critter is no more likely to go extinct than the Pope. There are plenty of places for it to hang on indefinitely.

So number one on the list is a lie.

Items 2, 3 and 4 on the list are, therefore, actions based on a lie. Now we are asked to do things that will cost us time and money because some people believe it’s right even though they present no evidence to justify such a request.

This should sound familiar, we see it in politics every day. Only in that forum we allow ourselves some leeway because we know the buggers are rarely honest, it’s why we invented democracy.

Now for a spoiler alert…

species go extinct

They always have.

An average mammal species is present in the fossil record for about 1 million years. There have been extinctions and mass extinctions throughout evolutionary history, some of them catastrophic, and almost all of them occurred before Homo sapiens even existed. And after each single or mass event, evolution continued to generate even more diversity. It’s what nature does.

So, get over it people. Species are an abstract concept, invented by us to help describe nature and how it works but mainly to satisfy our peculiar need to name and classify objects.

And then, for deep psychological reasons only Freud could begin to fathom, we assign a value to the object. Not the species you understand, the objects that make up the species.

This gives us items 5, 6, and 7 on the ABC’s list.

The objects in this case being specific individual koalas, that you or your canine companion (of a single species but with enough human selected natural variation in form and behaviour for a taxonomists to describe a Family or even an Order) might come across on your travels. Noting, of course, that most people will only see a koala in a zoo because they don’t take long walks in the bush staring up at the canopy.

What these ‘object-centered’ actions do ask is for us to be good citizens. People who are careful, aware of what’s going on around us and should we see distress, offer help. Nothing at all wrong with any of these. It’s just they should be a given. I would want to do this anyway for all objects, including other people, and I would want my kids to be vigilant too. It’s the biblical golden rule from Matthew 7:12 “Do unto others as you would have them do unto you“.

Item 8 on the list is, well, it’s blatant marketing.

A hotline? Come on ABC you are supposed to be the last bastion of the precommercial world where information is the currency, not profit or popularity.

The ‘simple steps’ in this list are just an opinion.

So sorry ABC, not fair dinkum, not fair dinkum at all.

Little gem – more hopeful

Little gem – more hopeful

TED talks have been around for a long time now, since 1984 as it turns out. There are over 2,000 of them, most in that punchy, smart format that makes even challenging ideas accessible.

Here is a collection of eight of them that Kara Cutruzzula selected on how to be more hopeful

They have these messages…

  1. Shift your expectations
  2. Recognize that you can change your life at any point
  3. Look for meaning in the most challenging moments
  4. Listen to another person’s story
  5. Return to your home base
  6. Add some wow to your world
  7. Remember the essential goodness of humanity
  8. Think about your death (yes, really).

A good list, a little gem, and well worth a look.

Cost shifting

Cost shifting

I guarantee that at some point in your day you shift a cost.

Something done will benefit you at the expense of someone else and, in far too many instances, ultimately impact on the environment.

But don’t feel too bad for you are not alone. We all do it.

Every day I put waste items in the garbage. When the kitchen bin is full, I empty it into the dustbin that each week is collected. My garbage is transported to a landfill where it is covered with layer after layer of trash from my neighbourhood and periodically capped with soil. In time my garbage decomposes and releases methane to the atmosphere and a smell to the surrounds.

I trust that the landfill facility is well managed so that any smell is contained and that nothing too toxic leaks into the groundwater.

I know that my garbage is going to be in the ground for a very long time carrying risk of contamination so I also hope that the landfill site is well chosen and remains contained.

Of course I pay for the collection, transport and management of my garbage that in modern times might include the capture and flaring of the methane. But these costs are really to cover the collection actions and not the long-term contamination risk.

That risk is external to my transaction. I do not expect to pay if the structural engineer got it wrong.

What if I wanted to do something about this external cost? It is impossible to live in a modern city and not generate at least some garbage.

I might compost any green waste at home. This would be good, as would diligence in filling up the recycling bin. I could separate all the plastic bags and send them to a recycler. And, of course, take reusable bags to the grocery store. And even if I were diligent in these things there would still be some packaging around the cheese or the preschitto that would need a bin.

When I’m out and about there is coffee, the muffin, the business lunch, the snacks my wife so lovingly packs into my man bag and goodness knows how much garbage from Tuesdays take away sushi.

The reality is that there is a packaging externality created in our modern world. Just now we are beginning to realise that the oceans are copping most of this cost as huge plastic gyres and then surreptitiously returning some of it to our bodies in the seafood we consume.

The truth is that every resource we consume creates an externality somewhere. Greenhouse gases, ozone depletion, water pollution, smoke, dust… You get the idea.

Human ingenuity changes the way ecosystems function and we are not always sure by how much or with what consequence. When the consequence is the depletion of function that humans find useful then it is a cost. And if we’ve ignored the cost by assuming its either of no consequence or absorbed by the system without undue pain then we have shifted it.

Shifting costs is pervasive and hard to stop. Everyone does it all the time, individually and collectively.

There is little point in beating yourself or a drum on this though. It is impossible to live as a modern human and not shift costs. It is an inevitability built into our lifestyles and the commerce that creates them.

However, it is possible to become much more aware of this reality and at least give some thought to the external costs of the things we do.

In time, thinking might even change us a little bit. Perhaps enough to stop the gyres accumulating out of control to rise out of the water and take over the world.

Little gem: Political divide

Little gem: Political divide

Many a time on this blog there will be rants and raves about the dreadful state of our political system, our mindless discourse, and our ever growing inability to see the truth.

Recently the former US first lady Barbara Bush passed away after a long and fruitful life. A group photograph was taken at her funeral of the first ladies and their spouses who attended the funeral.

As Micheline Maynard writes in an ABC article, a photograph taken by former White House photographer Paul Morse, says a great deal about many things. Overwhelmingly though it shouts about humanity, our extraordinary ability to be positive, to cooperate and to be friendly even at a time of great sadness.

Former adversaries are not anymore. They don’t need to be for they are no longer in office.

In retirement they revert to what people are best at, smiling and connecting with each other.

No doubt this image is copyright but who cares, it’s fantastic and more people should see it.

If a grump asks I’ll take it down but it would be a shame.

Little gem: Why not?

Here is a little gem so obvious that Blind Freddie would not only see it but would immediately invest in it…

And it is so simple.

  • Extract out of the ground fossil energy
  • Heat it so that it changes its structure into material that can be molded into infinite number of useful objects and then manufacture them on mass.
  • Sell these useful items to consumers, ideally so that they use them once and have to go and buy another one the next time they need it
  • Let the used item fall away into whatever waste system is in place
  • Rummage around in the waste to find the used useful items
  • Reheat them again so as to make another even more useful material
  • Sell this useful material and make roads out of it
  • Ignore the obvious flaws in the gem

Leadership failure

Leadership failure

Cheating at sport is, well, unacceptable. Yet it happens every day with no sport immune. There will always be one individual in the tournament or player in the team or coach on the sideline who will succumb to the pressure to win, the stress to perform, or simply base instincts.

This is why each sport has rules that sets the frame for what is acceptable, what’s on or close to the nose, and what is simply cheating. Equally, most sports have a fair bit of trouble either defining or enforcing the rules even with umpires and referees present to observe and, where required, intervene.

So if the soccer forward dives in the box at the slightest hint of a nudge from a defender then the referee has to decide. Is this a penalty or not? Some forwards dive. Some don’t. Sometimes it is actually a foul. Altogether a gray area of the rules.

Messing with a cricket ball is similar.

It is against the rules at all levels of the sport but it happens every now and then. Most of the time unnoticed and most of the time to no material effect on the outcome of the game. But it is against the rules. Players who do it are cheating.

So what is different in Australia right now?

A player in the national cricket team roughs up the ball with sandpaper. National outrage. Incredulity and anger. A failure of leadership because the captain of the the Australian cricket team sanctioned premeditated messing with the ball.

In short, cheating surely.

But, on the face of it, nothing.

All it took was a player, the vice-captain, with a history of volatility who was under a lot of pressure from the opposition and the crowd, his captain also under strain, and a compliant junior team member making a really bad choice when the team was losing.

Nothing more than a dive in the box.

Well the face is not the story at all. The response of a nation is always more. It reflects real needs. In this case leadership in the way that the society wants and needs.

The public frenzy over a misdemeanor that the international sporting body punished with a one match ban and a match fee fine, is the release of feelings that are simmering under the surface, a deep anxiety that has been there for a very long time. And it has something to do with a lack of direction. An uncertainty in the collective moral compass of not knowing what to stand for or against. And until a cricketer did something really stupid we did not realise how bad this feeling was or where it comes from.

Here is one possible source.

People mostly have no idea what the rules are in politics and business so they can’t really tell if societal leaders fail or not. Most of us have an inkling that they do but we cannot be sure. When they transgress with their secretaries it is one of the few times we see the line we want them to keep behind. The rest of the time we just have a hunch. So when they fail asylum seekers or spend way too much on submarines or let the energy grid fall over whilst carbon emission go up we don’t really know if they are cheating. They are not strictly breaking the rules, just dancing on the line through omission.

On the sporting field, however, we do know.

We can see the cheat. And when that is a premeditated act not only sanctioned but organised by the leadership, we are appalled. It triggers our real need for leaders to be better than us. They are not supposed to cheat, not even to dive in the box. But we know that they do. Seeing it starkly in our leisure time is shocking. It tweaks our subconscious to the truth that this is also happening in other leaders, the ones that really matter to our lives. It freaks us out.

The difficulty is that the leaders that matter stand up and lament the errors of the sportsmen, neatly deflecting from their own vast inadequacies. Until we call them out on their equivalent of ball tampering that they indulge in almost every day, and we do it with the same fervor we have for a national sport, then we will have to live with leadership failure everywhere.