News

Bankers' Pay - Is it Justified?



25 March 2011

Bankers' pay has become one of the hot topics of the global financial crisis.

The crisis has raised questions as to whether there has been a link between executive compensation and excessive risk-taking in the finance industry, whether more intense regulation is justified in the banking sector than in the general corporate sector, and whether bankers are simply paid too much.

An article entitled 'Keep it in the Bank' in the Business Review Weekly by Anthony Sibillin (24 March 2011), examines some of these questions in relation to the chief executives of the big four Australian banks.

The article cites Professor Jennifer Hill, who is Professor of Corporate Law at Sydney Law School, and researches in the area of executive compensation and corporate governance.

Professor Hill notes that the escalation in executive pay in Australia is commonly justified by "the fact that increasingly Australian companies need to compete internationally and appointments are now made from a global talent pool".

Nonetheless, international research suggests that executive pay is more strongly linked to company size than performance.


Contact: Greg Sherington

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