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Market power allows CEOs to raise their own salaries, Queensland economists say

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Flavio Menezes News

John Quiggin,Better Competition Better Prices,Accc

Economists like John Quiggin believe executives are able to 'cream money off the top' on the back of growing market power and wider profit margins.

Monopoly power has allowed CEOs of large companies to give themselves large pay rises, University of Queensland economists say.The government will consider the 44 recommendations put forward in the Better Competition, Better Prices report.

"There will be a compensation committee, but the CEO has a lot of influence on that so to a significant extent they can set their own pay. In 2022-23, former Coles CEO Steven Cain's total compensation was $10.2 million and new CEO Leah Weckert's was $3.3 million. Professor Menezes said these top-end managers were then able to make their companies even more profitable, increasing their market power even further.

Professor Quiggin said until the late 1970s, productivity growth and wage growth tended to rise together.

 

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