It’s not hard to form the opinion that Alinta CEO Bob Browning seems to favour a rather greedy corporate culture. Perhaps in America, it would be called “ambitious” rather than “greedy”, but you get the drift.
For a start there’s Alinta’s’s outrageous fee gouge, nicely documented by Alan Kohler – it makes Macquarie Bank and Babcock & Brown look like charities. Then there’s the swifty Alinta is trying to pull over the ACCC with its APT game, whereby it gives an undertaking to get its AGL deal done and then tries to renege.
And now Alinta’s Browning is being held up as a prime example of how CEOs are copping much bigger remuneration than their shareholders are being told about.
A study by governance advisers ISS Australia highlights how CEOs at the biggest companies are, on average, getting $2.5 million more than their shareholders know about it via a serious mismatch between the disclosed “fair value” of options in annual reports and what they are actually worth. Exhibit A, CEO Bob:
An example was Alinta, where the value of 40,000 options exercised by chief executive Bob Browning last year was 33.4 times the fair value placed on the options in the 2003 annual report.
The report disclosed a “fair value” per option of 20¢, which put a total value on the tranche at $8000. Mr Browning actually made $6.68 per option, exercising them at $4.52 each in 2005 when Alinta shares were trading at $11.20.
Somehow, one is not surprised. Among the other examples, BlueScope’s Kirby Adams picked up $4.4 million on options valued at $480,690 and Axa’s Les Owen’s $166, 650 “worth” of options actually came in at $1.6 million.
Now, let’s hear it again from some CEOs about how costs must be curtailed and the rising price of labour is a bad thing, never mind a lecture on the sanctity of transparency and disclosure.
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