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Executive salary hikes slammed as jobs cut -

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Executive salary hikes slammed as jobs cut

The World Today - Friday, 27 February , 2009 12:10:00

Reporter: Sabra Lane

ASHLEY HALL: There's not much these days that unites the Federal Government and the Opposition but
today they've found one issue they do agree on - excessive executive salaries.

MPs on both sides have universally condemned the pay packages for the chief executive and directors
of Pacific Brands.

The company announced earlier this week that it would sack more than 1800 workers as it closes its
Australian factories and moves its manufacturing offshore.

Today it's been revealed the company gave its executives pay rises of 170 per cent last year.

The union chief Sharan Burrow says it's an example of 'a shocking lack of morality from our
greediest CEOs'.

Federal politicians say the issue of remuneration is for shareholders, not governments to decide.

But Greens senators say the Federal Government can and should act.

From Canberra, Sabra Lane reports.

SABRA LANE: Pacific Brands has defended the pay packages of its CEO and board directors.

The chief executive Sue Morphett's pay trebled last year to $1.8-million after she was promoted
from general manager of underwear to company CEO.

The company says in fact Ms Morphett took pay cut - that her million plus package was half that of
the previous company chief.

It's also been revealed the total pay package for the company's 13 directors almost doubled last
year to $15-million.

Pacific Brands says the decision announced this week to sack 1800 workers and move offshore was
made after a review and that the redundancies are regrettable.

The ACTU president Sharan Burrow is fuming.

SHARAN BURROW: Corporate Australia has lost its way. There's no leadership. There's a lack of
morality. This is anger making and the rising tide of concern, of anger in the community is calling
on the Government to act. It is time we cleaned up this shocking lack of morality from the
greediest of our CEOs.

SABRA LANE: Over the past two years Pacific Brands had received more than $17-million in government
assistance.

The revelation of the excessive pay packages has united both the Federal Government and Opposition.

Speaking on Channel Seven, Infrastructure Minister Anthony Albanese said it was an issue for the
company's shareholders.

ANTHONY ALBANESE: This is certainly a red hot decision for a board of directors and management to
be sitting down and planning to sack workers. And I think all Australians out there watching the
program would just say, for goodness sake, wake up to yourselves.

SABRA LANE: Families Minister Jenny Macklin:

JENNY MACKLIN: Ordinary people in the street just, well they say to me, how can on the one hand all
of these people lose their jobs and on the other, executives walk away with these massive payouts?

SABRA LANE: Climate Change Minister Penny Wong:

PENNY WONG: I, like I'm sure all Australians, am appalled at the prospect of people awarding
themselves pay rises in these circumstances.

SABRA LANE: The shadow treasurer Joe Hockey:

JOE HOCKEY: I am surprised that the large shareholders in Pacific Brands haven't got something to
say about not only the damage to the brand, but significantly why, ask some serious questions of
why they had to lay off 1850 workers and still pay executives very significant sums.

SABRA LANE: The deputy liberal leader Julie Bishop says the Coalition is more concerned about those
being sacked.

JULIE BISHOP: The Opposition is concerned to look after the interests of the workers and that is
what we will be doing.

SABRA LANE: Government frontbencher Anthony Albanese says governments can't intervene into the
affairs of corporations.

ANTHONY ALBANESE: What we shouldn't do is overpromise and suggest that we can suddenly come in as
the big state operation, big government and decide what all corporate executives will be paid.

BOB BROWN: Isn't it extraordinary that we have got a Labor Government, a government of the workers,
of the battlers, simply playing to the tune of the big end of town. It's high time the Prime
Minister said exactly how he is going to curb these obscene packages.

SABRA LANE: Greens leader Senator Bob Brown says the Prime Minister often talks of a crackdown on
executive pay but does little to follow it up.

BOB BROWN: The Greens will be introducing an amendment to the tax laws in the next session of the
Senate to take away tax deductibility for CEO payments of more than a million dollars a year.

SABRA LANE: And Senator Brown says the Prime Minister should follow the example of US President
Barack Obama.

BOB BROWN: President Obama has cut to $500-million packages going to CEOs which receive government
assistance in the United States. Why can't the Australian Labor Government do that? The Labor
Government has the ability to legislate for anything to do with corporations. That is the
corporations power under our Constitution. The responsibility resides with the Federal Parliament
and the Federal Government.

SABRA LANE: The Prime Minister will meet with the US President on March the 24th. A trip Mr Rudd
was planning in April to attend a G20 meeting in Europe has now been extended to include the United
States and a one-on-one meeting at the White House. The two will discuss the global economic
crisis, Afghanistan and climate change.

The Government's revealed this morning it will unveil its draft emissions trading scheme
legislation on March the 10th. The Climate Change Minister Penny Wong has written to the Senate
today asking that its economics committee to hold an inquiry and review the bill but report back by
April the 14th.

The Australian Industry Group's Heather Ridout has called today on the Government to delay the
scheme's introduction by two years because of the global financial crisis.

The Climate Change Minister says no. The scheme, she says, will start next year.

PENNY WONG: We do not share her view nor her industry association's view on the start date and
there is a very simple reason for that which we have said many times and it is this.

The longer we delay, the higher the costs.

ASHLEY HALL: The Climate Change Minister Penny Wong ending that report by Sabra Lane.