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Murray calls for action on golden handshakes.

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Media Release


16 February 2003


Commonwealth Bank chief executive David Murray has presented Treasurer Peter Costello with a golden opportunity to respond to public anger over excessive payouts to business executives.

Speaking on the Business Sunday television program today, Mr Murray offered to ‘get around the table’ with the Government and the Australian Securities and Investments Commission to discuss ways to improve discipline over executive payments.

Mr Murray said current practice was to report payments not when the contractual obligation arose, but when the payment was made. He said:

… companies do not do it that way and the reason is that if we were thinking up a solution to this we would say well why don't you table all contracts when they're entered int. Now that would have quite interesting competitive ramifications for companies, and if we're to find a different solution to this disclosure then I think we've got to get around the table with the Government and ASIC and see whether there are some solutions like tax deductibility and so forth that would make it easier.

Mr Costello should take up Mr Murray’s offer and convene a meeting with business representatives to find ways to bring excessive corporate golden handshakes under control.

Mr Costello can demonstrate he is not all smirk and no action, by offering specific proposals to tackle the problem. He should make those proposals available for public comment.

Labor has raised a number of suggestions for tackling excessive executive payouts, such as empowering shareholders to make their views on remuneration clear at annual general meetings, and tightening up tax treatment of executive payouts.

Instead of frustrating efforts at reform, as he did last week by defeating Labor’s amendments to the Corporations Act that would have allowed shareholders to move resolutions on executive remuneration, Mr Costello should come up with some constructive proposals of his own.

Further information: Robert Garran (02) 6277 4803, 0419 692 504

TELEPHONE: (02) 6277 4803 ã FACSIMILE: (02) 6277 8496