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Executive pay: Economic issues from the Commission's report

Chairman's speech

Gary Banks gave this speech to the Economics Society of Australia, Canberra Branch Annual Dinner on 14 October 2009.

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  • Contents


The public company is the solution, not the problem

But every benefit has a cost: the principal-agent 'problem'

When is high pay a policy problem?
High pay can create wealth
High pay can also transfer wealth or even destroy it
Whose problem is it anyway?

Big pay is a big company story

Dominant influences on pay quantum: efficient or inefficient markets?
Increased company size, globalisation and competition for top talent
Lake Wobegon effects?
Incentive pay
What you see is not what you get - measurement issues
Performance pay means more pay
More incentive pay for bigger firms?

Has incentive pay worked?

What role for government?