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Gender and climate not big on the agenda at scandal prone CIMIC

Colin Kruger, CBD

CIMIC (it's Spanish for Leighton Holdings) released its annual report on Wednesday with some innovations on how it is prioritising the many challenges a global construction giant might face in the big bad world. 

You know, the sorts of things that might lead to allegations of bribery and corruption in major newspapers and investigations by the Australian Federal Police and criminal charges. 

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Who knows where CIMIC 's executive chairman, Marcelino Verdes, got the idea from, but in November last year his group conducted a "materiality assessment" to identify the economic, environmental, social and governance issues that could impact on the company.

It conducted interviews with its senior managers, analysts at broking firms, and environmental, social and governance groups, and came up with a 39 "material issues", along with a ranking for each in terms of importance and impact. 

No prizes for guessing public safety was the only issue that pipped bribery and corruption as the highest priority on the list.

Aligning remuneration with performance came in at 14. Which adds spice to the fact that the same report reveals Verdes trousered a $17 million pay packet last year.

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Promoting gender equity came in at 24, just ahead of "reducing the consumption and wastage of water".

"Dealing with climate change threats and opportunities" came in towards the bottom of the list at 37.

Meanwhile at 29 was: "Growth in renewable energy supply potentially leading to a decline in demand for thermal coal and the impact on contract mining opportunities."

CIMIC makes big money in mining in case you didn't guess. 

Going postal 

Australia Post's desperate defence of Ahmed Fahour's $5.6 million pay packet fails at the first hurdle.

If his remuneration was so appropriate for the position, why has the taxpayer-owned organisation gone to such lengths to hide it, before being sprung by a Senate committee on Tuesday evening? 

No doubt he is one of the nation's most prominent executives, having only last month received an Order of Australia for distinguished service to business across the postal, banking and investment sectors. 

But let us do some more checking on whether his pay is appropriate for "the size and complexity of the organisation, which has an annual turnover of more than $6 billion" and 50,000 employees, if you include the people employed by private operators.  

Given Australia Post is a government-owned entity, maybe we should compare it with the US Postal Service, which generated revenue of more than $US70.4 billion ($92.3 billion) last year, and has 493,381 employees.

The boss, Megan Brennan – the first woman in history to hold the job – gets a base salary of $US276,840 ($363,103). 

But maybe we should be making comparisons on Australia's incredibly well-remunerated shores. Medibank was a taxpayer-owned asset until recently and reported revenue totalling $6.7 billion last year. 

In his last full year in charge of the health insurer in 2015, chief executive George Savvides was paid $2 million.

We might get a better comparison when comparing Fahour's pay to the new boss at Medibank. 

Prior to his role at Medibank, Craig Drummond was a senior executive at NAB – just like Fahour. 

Drummond is starting at Medibank on a base pay of $1.5 million and the opportunity to receive up to another $4.5 million in incentive payments if he achieves an "outstanding performance", Medibank said.

Not that Drummond is on track to achieve an outstanding performance in the cutthroat health insurance market, judging by his recent comments.

But Fahour's pay is looking toppy even in comparison to the job he missed out on, CEO of one of our big four banks. 

ANZ reported a $7.2 billion net profit last year, employs 50,000 people, but the boss, Shayne Elliott, took home a relatively modest $5.07 million – more than $500,000 less than Fahour, whose organisation reported a $41 million profit.   

NAB, which reported a $6.5 billion cash profit, paid its boss Andrew Thorburn, $6.7 million last financial year, matching the $6.7 million paid to Westpac chief Brian Hartzer.

Thanks to the decision by a Senate committee Tuesday night, we now know that one senior Australia Post executive, understood to be Fahour, received a $4.4 million salary with bonuses and $1.2 million in superannuation.

The company published detailed information about executive salaries up until its 2014-15 annual report. The last time Fahour's salary was listed was in the 2013-14 annual report, when he received a salary of $1.7 million and a bonus of $2.6 million.

A further $2 million he was due in net superannuation payments was "mutually agreed" to be turned into a pre-tax $2.8 million donation to the Islamic Museum of Australia, founded by his brother Moustafa Fahour.

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Got a tip? ckruger@fairfaxmedia.com.au 

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