Rebel members of the nation's biggest accounting association have welcomed the sacking of controversial chief executive Alex Malley but slammed the board's decision to give him a $4.9 million golden parachute.
CPA's board released a statement late on Friday evening announcing that Mr Malley had been sacked, effective immediately, and would be receiving the multi-million dollar termination benefit.
"At its meeting today, the Board decided to terminate Alex's contract in order to allow CPA Australia, CPA Australia staff and Alex to move forward," president Jim Dickson said. "In the interests of full disclosure, CPA Australia has made a payment of $4.9 million in accordance with our obligations."
Mr Malley's company secretary Adam Awty has been appointed interim CEO while the board conducts a search for Mr Malley's successor. Mr Awty will continue earning his current salary of almost $950,000.
"Alex's legacy is an organisation with a global footprint and an ambitious outlook. We know that he will be very much missed by his colleagues and friends," Mr Dickson said.
The board also announced it is reopening applications for new directors, a process that closed on May 29, the day before former president Tyrone Carlin resigned and board and executive remuneration was publicly revealed. Eight new faces will sit around CPA's board table by October 1.
CPA and its leadership has in recent months been besieged by growing public criticism of its expenditure, governance and culture under Mr Malley and his key lieutenants on the board of directors, Graeme Wade and Richard Petty.
Rebel members are now crowd-funding to sue the board for breach of directors' duties while the Australian Securities & Investments Commission investigates the accounting body. CPA's designated regulator, the Professional Standards Councils, intends to end the scheme under which its members are protected by limited liability.
Mr Malley declined to comment when contacted by the Financial Review.
Members welcome move
Rebel members, who have been seeking change at CPA, welcomed the move to sack Mr Malley but questioned the size of his payout.
"I am very pleased that Alex Malley will leave CPA Australia because of the perceived damage that his leadership has caused to my professional body," said Marcia O'Neill, a fellow of the CPA who is a former board member and former Victorian divisional president.
"It is still unclear what the terms of his departure are and I am aghast at the figure of $4.9 million. Member will be very concerned about this as it indicates that those five long-standing board members who remain seem to have not tackled this issue in the way the membership has sought."
Ms O'Neill also thanked Brett Stevenson, the NSW accountant who in February effectively kick-started the public campaign calling for wholesale change at the accounting body.
"I and other members are indebted to the courage of Brett Stevenson," she said. "I look forward to ASIC progressing their investigation with the forensic accountants working through all of the accusations that have been aired in the press, particularly the area the directors fiduciary responsibilities."
For his part, Mr Stevenson was angry about the "scandalous" payout given to Mr Malley.
"This is an outrageous amount to pay. The board need to go, to have approved this, let alone allow CPA to fall into such a sorry state," he said.
Mr Stevenson said he would continue with a campaign to raise $80,000 for a legal fund originally aimed at removing Mr Malley and making the organisation more democratic. Now Mr Malley is gone, Mr Stevenson wants to use legal action to force change in the governance at CPA.
"We will be still pursuing legal action with our fighting fund," he said.
The fund, announced on Thursday, already has $12,500, Mr Stevenson said.
'Belated action'
Ruth Medd, a fellow of the CPA who is also the chair of Women on Boards, said the board had, belatedly, taken the right action.
"Congratulations to the board for finally doing the right thing by the members and Alex. But it's taken far too long and the damage has already been done," she said.
"The payout is also very large and looks to me to be beyond community expectations. Looking at the quantum of the payout, it appears that if you discount any entitlements, he's been given two-plus years on termination payments, which seems too large to me."
Ms O'Neill, Mr Stevenson and Ms Medd all called for Mr Malley to stand down after his $1.79 million pay packet was revealed in The Australian Financial Review at the end of May.
The size of the payout, relative to the organisation's member fees, caught the eye of Stephen Taylor, a fellow of the CPA and an accounting professor at UTS.
The termination fee was equivalent to "7000 member fees for a year," he said. "Why was a golden parachute agreed to when so much was spent promoting his own brand as against CPA?"
Professor Taylor, who has repeatedly called for transparency and changes in the way CPA is run, said details of Mr Malley's contract need to be revealed to members.
"Two things need answering: When will the exact terms of the contract that result in the payout be disclosed to members, and who were the exact [people] who agreed to it originally. They are now accountable to members for this massive payout. It highlights how poor the overall governance has been," he said.
Ultimatum to board
The sudden firing of Mr Malley came after chair Jim Dickson had praised his performance in a statement on Friday, June 16, which also announced a "fiercely independent" review of the organisation by prominent admirers of Mr Malley.
At the time, Mr Dickson said "CPA Australia is enjoying unprecedented success" that was "in so many ways this is due to the leadership and vision of our chief executive."
It is understood the 18-member NSW Divisional Council, which represents 41,000 CPAs, in concert with the councils of other states, had mobilised during the week to force the board to act.
The councillors held a series of meetings on Wednesday with CPA board members and members of the representative council, a group whose only power is to appoint members of the board. Their message was that Mr Malley could no longer remain as CEO of the accounting body.
The board met on Friday during a marathon session where the decision was made to sack Mr Malley. The meeting lasted until around 10pm, with a release sent out shortly afterwards.
