Pacific Brands - where Law does not equal Justice - and where is the ACCC?

[pahoffm]

Pays to be boss not worker at Pacific Brands

Ari Sharp and Ian McIlwraith
February 28, 2009

http://business.theage.com.au/business/pays-to-be-boss-not-worker-at-pacific-brands-20090227-8kea.html

PACIFIC Brands' former chief executive, who ran the debt-fuelled buying spree that contributed to the savage job cuts announced this week, was effectively given a big pay increase in the final year before he left the company.

An analysis of executive pay at Pacific Brands since it listed in 2004 shows that while the company's department heads averaged $667,000 in that first year, by the end of June last year they were getting an average of $924,000 each — an increase of about 40 per cent.

When announcing the plan to shed 1850 employees earlier this week, chief executive Sue Morphet said the redundancy costs would be about $100 million, suggesting an average payout of less than $55,000 for each worker.

Ms Morphet's predecessor, Paul Moore, was on a much more generous basic salary and bonus system before she took over in January last year.

Pacific Brands' annual reports show the company wound back its executive incentive system between 2007 and 2008. While Mr Moore was entitled to get a bonus of up to 200 per cent of his base pay of $1.2 million in 2007, his last full year with the company, he received only $250,000.

When Ms Morphet was appointed, the board doubled her basic salary from about $350,000 to $700,000, reflecting her promotion from running a division to running the lot — but her bonus was limited to 100 per cent of that base.

Pacific Brands also shifted the hurdle rate for executives to qualify for a bonus. In 2007, the test was a 5 per cent increase in net profit for the company, which it just made. Most executives that year only received fractions of their potential bonuses.

In 2008, that shifted to the executive team having to beat a budgeted 17.6 per cent increase in earnings before interest, tax and amortisation. Again, the company only narrowly beat it.

Pacific Brands' net profit since listing in 2004 has gone from $88.4 million to $117.1 million last year, an increase of about 32 per cent. Its shares have also dramatically underperformed the overall market in the five years, having shrunk from a $2.50 float price to a close of 22.5¢ yesterday.

The 2008 executive payments figure excludes the extra $3.5 million Mr Moore received as a retirement payment when he stood down halfway through the 2008 financial year.

As well as that payment, Mr Moore's salary was 22 per cent up on the 2007 financial year — when he was chief executive for the entire year. Included was a jump in his basic salary of more than 30 per cent to $1.56 million for the half-year he was there.

If he had served as chief executive for all the 2008 financial year at the same pay rate, his package would have skyrocketed 145 per cent. During his tenure, the company went on an acquisition spree that included the Yakka Group of companies, including the iconic Hard Yakka brand, streetwear labels from Globe International and the Sheridan bed linen business.

The failure of the company to properly manage its portfolio of more than 300 brands and its more than $800 million in debt were cited as key problems that triggered its decision to cease clothing manufacturing and shed more than 1800 workers.

Mr Moore was unable to be reached yesterday. Pacific Brands did not respond to requests for more information on its executive bonus schemes.

 

[Rosy]

Apparently they're reassessing their decisions. The backlash and non-acceptance of their selfish acts by the general public has been very damaging for their brand.

 

[mld]

How many people does Pacific Brands employ?

 

[pahoffm]

What the above reference doesn't show is 2 charts.

It shows that over the last 5 years, Pacific Brands has consistently performed below the Comparative Returns of the ASX.

For that ordinary performance, Sue Morphet (despise her as we do), rewarded herself & her executives (cronies) as follows:

Pacific Brands Executive Lift.

	2004	2005	2006	2007	2008
Total Payments ($m)	$4.67	4.99	5.73	6.94	12.01
Number of Executives	7	8	8	10	13
Average per Executive ($'000)	667	623	716	694	924
Company Net Profit ($m)	88.4	100.9	101.2	106	117.1

Today's Age, Business Stn, p.3
As you can see, Pacific Brands had an increased profit of $11m in 2008. You can see that the Executive purse took 50% of it into their own bank accounts.

Yes, against 1800 staff losing their jobs, 13 disgusting individuals split $6m amongst themselves.

Of that, the "queen slag", Morphett herself, took more than the others.

Yet what does "our mate" Graeme Samuel & his ACCC do about this?

Niente!

The Executive of a corporation make decisions for their own benefit at both the company's & its workers loss, and the *smile*ing ACCC does nothing!


As I have expressed on another thread, Law and Justice can be at polar ends of the scale.

Law is a set of rules created and upheld to preserve interest, power and possession. It is created by those who wish to preserve that.

Justice is about fairness & equity, it has nothing to do with the preservation of interest.

To me, Morphet & her cronies should be charged in a court of law - not only charged with mis-using their powers as company executives but for "Un-Australian" activities too.

 

[pahoffm]

How many people does Pacific Brands employ?

9,000, of which 1,800 have been summarily executed.

Could have saved over $6m by returning their Executive numbers & payments back to 2004 levels.

http://www.pacificbrands.com.au/About-Us/default.asp

In 1987, we spoke of corporate greed and how it woiuld never happen again.

How quickly we forget!

 

[Tiger74]

what does the ACCC have to do with the salaries of a private company? As long as the board is happy with them, and the shareholders are happy with the board that endorsed them, what is the issue?

If the shareholders have an issue, they should take it up with the board. And if they don't get satisfaction, move their investment elsewhere.

Personally I want the Government to have nothing to do with how much I earn as a maximum. Fair enough protect workers with minimum wage requirements, but if the shareholders via their elected board endorse certain pay scales, who are the govt to come in without knowing the details of the industry and its particulars to say "no....you can only pay this much to her".

With regards to Pacific Brands, the only issue I have is that of the govt grants they received, but with regards to remuneration, I ain't a shareholder so it ain't my issue.

 

[mb64]

How many people does Pacific Brands employ?

1850 more than they want

 

[pahoffm]

Pacific Brands may benefit from Federal refund
Posted 3 hours 41 minutes ago
Updated 3 hours 16 minutes ago
http://www.abc.net.au/news/stories/2009/02/28/2504079.htm?section=justin

Manufacturer Pacific Brands may be about to get millions of dollars in Federal Government grants, just days after it axed 1,800 jobs across Australia.

The majority of the job losses are in Victoria, Queensland and New South Wales.

It has been revealed the company might be entitled to a refund for money it has already spent on research and development, and on manufacturing equipment.

The Government is pleading with Pacific Brands to keep as many jobs in Australia as possible.

The Maritime Union has welcomed news of talks between clothing company Pacific Brands and the Textiles Union.

It is also urging the company to do the right thing by taxpayers, the government and the workers.

The Maritime Union says if the company does not make the effort to keep the jobs here, it will make sure that none of the tax-payer subsidised manufacturing equipment will leave Australia.


Reward for Injustice - what a funny world we live in.

 

[1eyedtiger]

what does the ACCC have to do with the salaries of a private company? As long as the board is happy with them, and the shareholders are happy with the board that endorsed them, what is the issue?

Personally I want the Government to have nothing to do with how much I earn as a maximum. Fair enough protect workers with minimum wage requirements, but if the shareholders via their elected board endorse certain pay scales, who are the govt to come in without knowing the details of the industry and its particulars to say "no....you can only pay this much to her".

You tell me why as an ordinary Australian on an medium wage, why industry groups such as the Australian Industry Group should dictate to Australian workers wage rises and pay rates? These groups are nothing more than employer unions and are no better than worker's unions.

Back to the government. The government has put millions into this company. They have every right to come in and have a say in how it is run on behalf of the dimishing number of taxpayers.

But no, let's take your line then. Instead, would you object to a new tax rate of 99% for those earning over $1 million? Companies can still pay what they like, but the taxman will get most of it. If not, why not? What gives you or private industry any more right to tell the government how to run the country than the government has of telling private industry how to operate?

That's right, NONE!

Funny how businesses complain of government interference and regulation but are quick to come begging with their hands out for money under the guise of "Jobs will be lost if you don't" when things aren't going so well.

I for one resent taxpayers dollars paying for the salaries of a greedy few when workers (you know, the taxpayers whose money has gone towards paying these pricks) are losing their jobs.

 

[Tiger74]

You tell me why as an ordinary Australian on an medium wage, why industry groups such as the Australian Industry Group should dictate to Australian workers wage rises and pay rates? These groups are nothing more than employer unions and are no better than worker's unions.

Back to the government. The government has put millions into this company. They have every right to come in and have a say in how it is run on behalf of the dimishing number of taxpayers.

But no, let's take your line then. Instead, would you object to a new tax rate of 99% for those earning over $1 million? Companies can still pay what they like, but the taxman will get most of it. If not, why not? What gives you or private industry any more right to tell the government how to run the country than the government has of telling private industry how to operate?

That's right, NONE!

Funny how businesses complain of government interference and regulation but are quick to come begging with their hands out for money under the guise of "Jobs will be lost if you don't" when things aren't going so well.

I for one resent taxpayers dollars paying for the salaries of a greedy few when workers (you know, the taxpayers whose money has gone towards paying these pricks) are losing their jobs.

Firstly AIG cannot do anything. They are a lobby group. They don't set wages, they don't make law, they are like any other group out there with an agenda - they try to promote and push for legislation and regulation that benefits their members. As an open society they have every right to lobby, whether Govt listens or not is up to them.

As for a 99% tax, that is completely and utter ridiculous.

On corporate welfare, I'm not a big fan of it as you may know from earlier posts I had disagreeing with farming subsidies. If I don't like subsidies in agri, I definitely don't like them in manufacturing.

 

[pahoffm]

Personally, I'm all for each person trying to maximise their return on labour / capital.

However if a person gains at the cost of their fellow workers or the organisation they belong to then that to me is morally wrong.

On par, I felt the same way about unions interfering in company activities at the cost of jobs to their members.

 

[Tiger74]

Personally, I'm all for each person trying to maximise their return on labour / capital.

However if a person gains at the cost of their fellow workers or the organisation they belong to then that to me is morally wrong.

On par, I felt the same way about unions interfering in company activities at the cost of jobs to their members.

Morally wrong and legally wrong are two different things though. Legally it looks like this has been done by the book.

Personally this ain't the worst I've seen, try the Kodak deal (off a really rusty memory - I think they took Hawke for $40m and still left)

 

[1eyedtiger]

Firstly AIG cannot do anything. They are a lobby group. They don't set wages, they don't make law, they are like any other group out there with an agenda - they try to promote and push for legislation and regulation that benefits their members. As an open society they have every right to lobby, whether Govt listens or not is up to them.

As for a 99% tax, that is completely and utter ridiculous.

On corporate welfare, I'm not a big fan of it as you may know from earlier posts I had disagreeing with farming subsidies. If I don't like subsidies in agri, I definitely don't like them in manufacturing.

These days, worker's unions are nothing more than lobby groups too. Unions hold no more sway with the Labour party than employer unions do with the Liberals.

I, for the life of me can't see why someone can't just act in the interests of both employers and employees (and all other Australians for that matter). Instead, we have two parties intent on gaining the most points for their side without any regard at all for morals or ethics. Australia could have a set of laws that would strike a balance and be fair to all sides, but of course, that would leave the Liberal and Labour parties without any cause. We can't have that, can we?

The AIG hold more sway with the government than most other groups or individuals. It's my personal experience than most companies are members of the AIG and workers which aren't members of unions are not only up against their employers when disputes arise, they are up against the AIG as well. What really irks me is that many employers look down on unions for protecting workers rights and giving workers advice with regards to rights and conditions but at the same time consult with their own employer unions (the AIG and others) for exactly the same purposes.

It is complete hypocrisy.

99% tax is not ridiculous. Some countries already approach that figure. And why shouldn't the government try to restrict salaries in such a manner? Maybe then executives might get the hint.

What's ridiculous is someone taking huge bonuses while sacking 1850 employees because they weren't economically viable. Well, I think current executive salaries aren't economically viable either. But since one person's bonus is more important than the jobs of thousands of people........................

It's to the point where I almost feel ashamed to be part of the human race. (Not just this issue, many other past events)

 

[Tiger74]

These days, worker's unions are nothing more than lobby groups too. Unions hold no more sway with the Labour party than employer unions do with the Liberals.

I, for the life of me can't see why someone can't just act in the interests of both employers and employees (and all other Australians for that matter). Instead, we have two parties intent on gaining the most points for their side without any regard at all for morals or ethics. Australia could have a set of laws that would strike a balance and be fair to all sides, but of course, that would leave the Liberal and Labour parties without any cause. We can't have that, can we?

The AIG hold more sway with the government than most other groups or individuals. It's my personal experience than most companies are members of the AIG and workers which aren't members of unions are not only up against their employers when disputes arise, they are up against the AIG as well. What really irks me is that many employers look down on unions for protecting workers rights and giving workers advice with regards to rights and conditions but at the same time consult with their own employer unions (the AIG and others) for exactly the same purposes.

It is complete hypocrisy.

99% tax is not ridiculous. Some countries already approach that figure. And why shouldn't the government try to restrict salaries in such a manner? Maybe then executives might get the hint.

What's ridiculous is someone taking huge bonuses while sacking 1850 employees because they weren't economically viable. Well, I think current executive salaries aren't economically viable either. But since one person's bonus is more important than the jobs of thousands of people........................

It's to the point where I almost feel ashamed to be part of the human race. (Not just this issue, many other past events)

last time I checked it wasn't infighting in the AIG that kept a train on the platform of Richmond station for a day with a fault no-one is prepared to confirm actually existed. Unions still have power, much less than back in the 70's, but they are not a lost force.

Also the AIG is one of teh more reasonable business lobby groups. Try listening to the BCA, or the ACCI, both of whom have strong sway and are not connected to the AIG.

With regards to a 99% tax, name one country other than a communist one that has taxation at a rate of 90% or higher. 99% taxation is ridiculous because it gives too much economic power to the govt, increasing the chance of them completely cocking it all up. Also the more govt controls income, and the less the incentive for reward for effort, the more likely entrepreneurial efforts evaporate (why kill yourself for the profit of others), and it increases the likelihood of mass corruption. Need a case study? Check out the economic marvel of the former Soviet Union.

 

[Rosy]

I heard an interview on ABC radio today claiming that the Govt are looking at doing what Obama has done by limiting salaries to half a million dollars where companies are receiving financial assistance from them.

 

[1eyedtiger]

last time I checked it wasn't infighting in the AIG that kept a train on the platform of Richmond station for a day with a fault no-one is prepared to confirm actually existed. Unions still have power, much less than back in the 70's, but they are not a lost force.

Also the AIG is one of teh more reasonable business lobby groups. Try listening to the BCA, or the ACCI, both of whom have strong sway and are not connected to the AIG.

With regards to a 99% tax, name one country other than a communist one that has taxation at a rate of 90% or higher. 99% taxation is ridiculous because it gives too much economic power to the govt, increasing the chance of them completely cocking it all up. Also the more govt controls income, and the less the incentive for reward for effort, the more likely entrepreneurial efforts evaporate (why kill yourself for the profit of others), and it increases the likelihood of mass corruption. Need a case study? Check out the economic marvel of the former Soviet Union.

Sometimes the AIG is reasonable, sometimes it seems like they are just out for a fight. Just like the unions. Both sides have a habit of trying to push the boundries when it isn't warranted.

I haven't checked but I believe that England has a high rate of tax. Reason why many of their weathiest citizens have overseas bank accounts. Or used to. I don't know the current situation.

Ok, the AIG wasn't responsible for train delays. But the government and unions weren't responsible for the current world economic crisis either. The government surely couldn't have cocked it up any better than the private sector's current claim to fame.

Whether you agree with me or not, business's can legally kill people (I've yet to see industrial manslaughter laws be put in place yet) and with the aid of employer unions, strive to keep worker's conditions to a minimum whilst extracting the most amount of work out of them. Don't bother to mention fines which are really nothing more than a slap on the wrist and don't address the issue of who's truly responsible.

Whether you agree with me or, most of the working class work a hell of a lot harder dollar for dollar than executives.

You talk about incentive and "why kill yourself for the profit of others".

Exactly!

Explain that to the vast majority of Australia's working class, including myself?

 

[Tiger74]

I heard an interview on ABC radio today claiming that the Govt are looking at doing what Obama has done by limiting salaries to half a million dollars where companies are receiving financial assistance from them.

It will be interesting to see how they structure that. The thing with the USA is that the US Govt is taking shareholdings in a lot of these companies (they may end up owning as much as 50% of Citigroup), so as an owner you can naturally influence remuneration.

Thankfully in Australia we haven't had the same level of intervention. I would imagine you could try to bring in clauses to any govt funding (i.e. to get our dollars you must have xxxx wages policies), but how you minimize the loopholes would be tricky. If they go down this path it will be really interesting to see how they approach it.

 

[barty boy]

rosy how is the current economic condition affecting regional vic ,or at leat your area?

 

[Tiger74]

Sometimes the AIG is reasonable, sometimes it seems like they are just out for a fight. Just like the unions. Both sides have a habit of trying to push the boundries when it isn't warranted.

I haven't checked but I believe that England has a high rate of tax. Reason why many of their weathiest citizens have overseas bank accounts. Or used to. I don't know the current situation.

Ok, the AIG wasn't responsible for train delays. But the government and unions weren't responsible for the current world economic crisis either. The government surely couldn't have cocked it up any better than the private sector's current claim to fame.

Whether you agree with me or not, business's can legally kill people (I've yet to see industrial manslaughter laws be put in place yet) and with the aid of employer unions, strive to keep worker's conditions to a minimum whilst extracting the most amount of work out of them. Don't bother to mention fines which are really nothing more than a slap on the wrist and don't address the issue of who's truly responsible.

Whether you agree with me or, most of the working class work a hell of a lot harder dollar for dollar than executives.

You talk about incentive and "why kill yourself for the profit of others".

Exactly!

Explain that to the vast majority of Australia's working class, including myself?

UK tax rates for income max at 40%, company tax up to 30%, and cgt up to 40%.

most people consider Sweden highly taxed, their rates are max of 55%, company tax I think is similar.

This is well off 90%

In terms of industrial manslaughter, I have no issue with that as long as the legislation is properly framed (big difference between deliberately being negligent and not knowing better).

Disagree on the working class working harder than white collars. Seen absolute workaholics with both, and I've seen lazy pigs amongst both.

In terms of incentive, you don't like your pay, and don't like your job - find a new one (that's what I did when in that very situation).

 

[Rosy]

rosy how is the current economic condition affecting regional vic ,or at leat your area?

Minimal from what I can tell...certainly nowhere near as severely as the years of prolonged drought have.