Bunnings Bites Back
The Standard, and some other left blogs, have been critical of Bunnings for only paying workers a starting rate of NZ$12/hr compared to NZ$19/hr in Australia. They talk about the Australian CEO’s salary but that is a red herring. The questions I would ask is what is the EBITDA for the NZ and Australian operations, and also what are the gross revenue and staff numbers for each side of the Tasman. And what is the cost of living in each country.
Without that info, I can’t really offer an informed view as to whether Bunnings pay rates are reasonable in NZ compared to Australia or not. Also of course one of the incentives for employers to pay staff more, is the fact they may lose their staff to other employers who need those skills. In a low unemployment environment, this is a real issue.
Nevermind also blogged on this issue and e-mailed the NZ General Manager of Bunnings, who replied to him. Well done to Nevermind for publishing the reply, which is:
Thank you for your correspondence, as I am sure you will appreciate there are two sides to every story.
We have been negotiating with the National Distribution Union since May 2007, during this time we have lifted the average wage for all team members by 6.4%.This includes wages for union members despite being unable to reach agreement with the NDU. In addition Bunnings has also provided additional benefits which the NDU chooses to ignore such as 6% contribution to Kiwisaver, an offer to all team members of $1000 worth of shares in the company at the cost of one dollar, bonuses for all team members measured against store targets, dividends on shareholdings, to name a few.(around 80% of Bunnings NZ workers are shareholders)
Although the NDU publicly includes all Bunnings workers by insinuation in its press releases and pamphlets in fact they represent a little over 300 of our 2400 team members of which less tan 200 have joined in the industrial action taken.
We have a strong commitment to employing great people who want to work for us because it is a great place to work and in the main we believe we are achieving that goal despite the activities of the NDU.
I realise it is your choice where you shop but appreciate the opportunity to put the other side of the issue to you.
Now again I still don’t have information on exactly what the NDU is asking for, and what Bunnings have offered, so I’m not going to declare one side good and one side bad. But I will say I absolutely love the idea of a company where 80% of the staff are shareholders and would love to see more companies do this.
February 27th, 2008 at 3:43 pm
Interesting footnote to the NDU release illustrates the unions dishonesty:
“Wesfarmers, Bunnings parent-company and Australia’s biggest company”
Tell that to BHP. Elsewhere Wesfarmers is rated at Australia’s 17th largest company.
When they lie in such ways in one part of a press release, it made me wonder what other lies are present.
It looks like we now know other ways.
February 27th, 2008 at 3:48 pm
I had some relatives come over during Christmas and of course we went to Bunnings for that DIY dose everyone needs at that time of year. They commented that Bunnings back in Brisbane had an inadequately number of staff with poor knowledge of the items they were selling and a lower range of items being sold. They were very impressed with the high number of staff (across all different types of stores) and the knowledge of the items in their department.
If you increase your staff salary, you hire less staff, they have less time to become familiar with the items being sold and you loose customers.
Simple really.
February 27th, 2008 at 3:57 pm
This is the email I sent to Bunnings NZ General Manager, as per I/S’s suggestion:
Hi Brad,
I don’t know if NRT’s campaign to have people email you to whinge about other people’s wages has had an effect. If it has, & if you need something to cheer you up, I suggest having a read of this:
“… Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions–and you’ll learn that man’s mind is the root of all the goods produced and of all the wealth that has ever existed on earth.
“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made–before it can be looted or mooched–made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced. …”
The rest of that speech is online courtesy Capitalism Magazine at:
http://www.capmag.com/article.asp?ID=1826
Tonight, after work, I’ll drink a toast to you – and those like you – who are responsible for the fact that I live prosperously in a rich, thriving metropolis instead of starving in a tiny village of turf huts.
Yours,
Duncan Bayne
February 27th, 2008 at 3:58 pm
Bunnings is now part of Wesfarmers. Last year Wesfarmers retail (Coles and Bunnings) had an EBITDA of $2.3 billion. That’s overall – so far I haven’t been able to find separate figures, let alone for Australia vs NZ. Some more analysis here but still not the breakdown we need.
Shares in the company and bonuses based on store targets are certainly innovative and to be encouraged. It would have been useful to have had some indication of what those bonuses were worth to the average staff member. Presumably they also get staff discounts which – considering Bunnings seems to sell almost everything other than food and clothing! – are worth something.
The labour market in Australia is exceptionally tight which might justify the higher starting wage, but on the other hand I have to say that $12 an hour does seem, on the face of it, extraordinarily low. Though as you correctly point out DPF, more detail is needed before one can make a definite pronouncement one way or another.
The one thing I note about Bunnings in Australia (and I presume their operation in NZ is the same) is that stores aren’t exactly over-endowed with staff. You can wander around the huge barn for hours trying to find a coat hook or something and never find a staff member to ask for directions.
February 27th, 2008 at 4:06 pm
Does Dave think this has something to do with Bs capacity to pay?
Nah, it’s about the market price of labour.
February 27th, 2008 at 4:06 pm
Hi, thanks for the link, David.
I should note that in my email to him I did not say “I’m not shopping there because you pay shit wages”.
Instead, I referred to the fact that they have closed all dialog, called a mufti day on the day of stop work and provided pizza to the workers who stayed and other such antics. These in my eyes are bad faith gestures from the company towards it’s employees who believe they are not getting a fair deal.
February 27th, 2008 at 4:20 pm
Offering staff shareholder opportunities seems to be `an Australian thing’. My wife has been with Spotlight for 9 years and now has a very reasonable accumulation in the company – providing her store makes a reasonable profit each year this fund will continue to grow.
February 27th, 2008 at 4:22 pm
The problem here can be described in two words “Laila Harre”.
February 27th, 2008 at 4:29 pm
The NZ General Manager has no excuse for paying such low wages, and his attempts to undermine the union are unfortunate. If their starting rate is $12, how much of that 6.4% average increase since May 2007 has been due to impending increases in the minimum wage? The minimum wage was $11.25 in May 2007, it goes up to $12 per hour on 1 April 2008 – a 15% increase. If you lift someone on $12 per hour’s wage by 6.4% it is really not a lot of money. He doesn’t actually say what he has offered as part of a collective agreement. Is the 6.4% an average or median increase? How much of that is increases for management?
Also, Bunnings knows a 6% contribution towards Kiwisaver is unlikely to be taken up by the lowest paid workers because they can’t afford their own contributions towards the scheme, so it’s not going to do much to lift the lowest paid workers’ wages.
I agree the shares are a good idea though, but they shouldn’t be in substitution for a living wage or a collective agreement. Also, doesn’t Bunnings have something to gain from people buying their shares?
The issue about the CEO is not a red herring. The CEO got a 61% raise, taking his earnings to $2885 per hour. Does he really produce 240 times more than the lowest paid worker? A brain surgeon doesn’t even get paid $2885 per hour.
I’m sorry but you will struggle to look after your family on $12 per hour, a large company like this has no excuse for paying people such low wages, and no talk of EBITDA or gross revenue will change that.
At this stage, the NDU has not actually gone on strike, I understood they had stop work meetings under s26 Employment Relations Act 2000. After 9 months of bargaining this is not unreasonable.
Does Bunnings remind anyone of Progressive or Spotless?
February 27th, 2008 at 4:30 pm
“been critical of Bunnings for only paying workers a starting rate of NZ$12/hr compared to NZ$19/hr in Australia.”
Umm.. wages are lower in New Zealand. I didnt think that was a a big secret.
So the Lefts solution to the problem is to whine? Effective.
February 27th, 2008 at 4:32 pm
Good points by Tim. It’s also worth noting that Bunnings’ original pay offer was 0% and would have stayed that way had it not been for the union. How is a 0% pay offer going to help close the wage gap with Australia?
February 27th, 2008 at 4:35 pm
Interesting comment from Jackryan.
SO go work for Bunnings in Australia get paid more and have less product knowledge.
Work for Bunnings in New Zealand. get paid less and have more product knowledge.
Great for skilled workers. May be they should transfer to Bunnings Australia. “Get more know less could be the motto”
February 27th, 2008 at 4:38 pm
Chris S: calling a mufti day and providing pizza. What exactly was the problem with this? I presume calling a mufti day made it harder for union members to heckle non-union members who chose to work – avoiding them being labelled as scabs. Is that something that you see as bad faith – is there some right of union members to abuse non-union members who don’t strike?
February 27th, 2008 at 4:41 pm
“He doesn’t actually say what he has offered as part of a collective agreement.”
Not talking publicly about ongoing negotiations is now a bad thing?
The minimum wage went up. MINIMUM WAGE. There is no legislation that demands that all wages above the minimum also increase, you know.
“The minimum wage was $11.25 in May 2007, it goes up to $12 per hour on 1 April 2008 – a 15% increase.”
So all wages should go up the same percentage as the minimum wage? See my previous point.
“If you lift someone on $12 per hour’s wage by 6.4% it is really not a lot of money.”
And if people only worked for one hour at a time your argument wouldnt be completely moronic. As it stands a full time worker on $12 an hour would get an extra $1500 per year from a 6.4% increase.
“The CEO got a 61% raise, taking his earnings to $2885 per hour.”
A CEO isnt paid by the hour. Try and figure out why.
“Does he really produce 240 times more than the lowest paid worker?”
Um, yep it is entirely possible that he does. Try and figure out why.
February 27th, 2008 at 4:41 pm
“Instead, I referred to the fact that they have closed all dialog, called a mufti day on the day of stop work and provided pizza to the workers who stayed and other such antics. These in my eyes are bad faith gestures”
I see this completely different. I take that to mean that Bunnings is saying thank you to those that do work on IA days. To me it shows how much their extra effort is appreciated in having to cover for absent workmates.
The reason I see it this way is from personal experience. When some colleagues at the bank I work at went on strike (and I volunteered to work on a day off to help cover), we were also given pizza, drink and the chance to wear what we wanted. This was not to thumb the noses at those striking but to say thank you to those who had worked over and above what they were normally required to do. I do not think it is fair to label these gestures of gratitude as antics or as bad faith.
FTR – before anyone thinks they should call me a scab for working on a IA day on a rostered day off let me explain why I did. I did not believe the strike was necessary and I was appalled at the disruption members of FINSEC were willing to cause to our banks customers. The number of customers who personally thanked me and my colleagues who worked that day was astounding and rewarding in itself.
Edited: Clarity
February 27th, 2008 at 4:43 pm
So they want to be index linked to wages in another country?
If Bunnings opened an outlet in China would they want those wages?
If the exchange rate changes are they willing to take the corresponding drop in pay?
If they want Australian wages why aren’t they working in Australia?
These people do not make as much sense as they think they are.
February 27th, 2008 at 4:43 pm
I wonder what the staff would think if the share offer and 6% towards kiwi saver were pulled because of the mindless actions of the union members who are clearly a minority. Sometimes you just gotta pull your head in and enjoy the benefits that are on offer.If you want more money work towards advancement and earn it.Im so glad that there are no union members where I work,and if any union approached me to join I would have no problems telling them to pissoff.
February 27th, 2008 at 4:51 pm
Tane, what percentage of the staff at Bunnings earn $12 an hour? Most of them, or the brand new starters and part-time uni students? I’m pretty sure that you don’t start on $12 an hour, and 10 years later you’re still on $12 an hour (or whatever the equivalent starting wage is in 10 years time). As you gain skills your pay goes up – I’m sure most people are a bit more comfortable with someone brand new starting at this level than they are someone with some decent experience.
February 27th, 2008 at 4:52 pm
Wages are higher in Australia than New Zealand, across the board. That is a macroeconomic issue that Helen Clark and the New Zealand Labour Party are responsible for but don’t seem to be interested in fixing. Why hold Bunnings responsible for the failings of the Labour Party?
February 27th, 2008 at 4:56 pm
DPF, I notice that the information about the average number
of shares at what value per employee was not put out.
What utter fools they are to work for that rate of pay, the stores
in both countries pay the same for their stock, with the only
difference being the NZ/Aussie exchange rate.
God these staff are bloody thick, the boss is a good guy
because he gave them a slice of pizza.
Was it key that was saying that NZ wages were too high ?
Maybe he wants to follow the Richardson route of a low
wage economy to compete against China
February 27th, 2008 at 4:56 pm
pulled because of the mindless actions of the union members who are clearly a minority.
What you’ve got to realise is that frequently companies will make gifts to their workers as soon as union membership starts building in order to undermine the union.
In most cases the gesture is made only after unionised members start campaigning for better conditions, and it’s a very common union-busting tactic. There’s a tonne of literature on it and overseas there are professional union-busting consultancies that work exactly on this basis.
Basically it’s a short-term outlay to build confidence in the company, undermine the union, and in the long-run pay out less in pay and conditions.
February 27th, 2008 at 5:03 pm
Gee Tane your balls must be getting sore by having them kicked in by the facts all the time.
February 27th, 2008 at 5:05 pm
Kimble, I was demonstrating that the majority of the 6.4% increase was likely due to impending increases in the minimum wage, not because Bunnings is negotiating in good faith with the union or being generous to its staff. It undermines the NZ General Manager’s argument about what a great company they are by providing a 6.4% average increase.
So you think it’s moronic to say it is hard to raise a family on $12 per hour, even with the whopping extra $28 per week before tax provided by a 6.4% increase? It’s not a lot of money.
If he’s trying to justify his position in negotiations then he should say what Bunnings has offered as part of those negotiations. He doesn’t.
Why don’t you tell me how a CEO is worth 240 times more than a worker and justifies a $6m salary? Asking me to try to figure out why makes me think that you have no arguments in support of your position, only rhetoric.
February 27th, 2008 at 5:09 pm
Tane, union membership is low all over the country.
They don’t help themselves by their attitude. I almost fainted when someone told me what unions charge their members – and they take it out of every pay packet too.
I saw the watersiders on TV not so very long ago, and in their meeting one member stood up and advocated violence towards the bosses – no one raised the slightest objection. In fact, the union had been involved in violence in the previous months towards workers in another union.
Sorry, but I refuse to join criminal organisations like that. I also have absolutely no problem with companies that use legal means to drive them out.
February 27th, 2008 at 5:14 pm
if you’re seriously trying to raise a family earning minimum wage (for example as a trainee in an entry level retail position) – youuuuuuuuuuuuuure a moron.
February 27th, 2008 at 5:20 pm
“The head of the country’s biggest private sector union, Andrew Little, will not stand for Labour at the next election.”
another one escaping Planet Labour before it’s too late. Good on you, Andrew.
February 27th, 2008 at 5:21 pm
Ummmm, I thought you and your party wanted to close the wage gap with Aussie…???
February 27th, 2008 at 5:25 pm
Conor, you’re right. The kind of market fundamentalism we’re seeing in this thread is exactly why our wages are so low. Australia took the smart path of collective bargaining and awards and their productivity and wage growth has been all the better for it.
Meanwhile the Tories, as usual, begrudge a pay rise for minimum wage workers.
February 27th, 2008 at 5:29 pm
Tane,the share option and the6% were there before the squable and this is how the union members thank a forward thinking company.Its this sort of mindless action that all employees get punished for. Remember the employment contracts act? You know the one that Labour have adopted.
February 27th, 2008 at 5:29 pm
Scrubone, unions haven’t been criminal organisations since 1837 (in England). The only deaths on picket lines have been of workers, Fred Evans in 1913 and Christine Clark in 1999. If you want to talk about violence think about Massey’s Cossacks and the police in the 1951 lockout. The only violence I’ve ever seen on a picket line was from a manager during the Progressive lockout.
If you don’t want to join a union, fine, but then you shouldn’t expect the benefits of the Minimum Wage Act, the Wages Protection Act, the Holidays Act or any other form of legal protection for workers (as these were all lobbied for by unions), and don’t expect to get union negotiated pay rises passed on to you.
The union fee you pay is actually made up for in Credit Unions, subsidised health and dentistry, IRIS superannuation and so on, not to mention collective bargaining and legal advocacy and is usually subsumed by the pay increases you get from collective bargaining.
Farfetched and PaulL, the wages for people in these industries don’t increase with experience (unless there’s a CEA in place). The recent increases in the minimum wage were the biggest pay increases some workers like cleaners and public hospital workers have had in 20 years. That’s shameful. People with 20 years’ experience still earn the minimum wage in these industries.
Farfetched, are you saying that poor people shouldn’t have children? What next, sterilising people with genetic abnormalities?
February 27th, 2008 at 5:35 pm
So why are these people not on a plane out of here for Aussie? Clearly after 8 years of Labour govt they are still as badly shafted as they were before Labour came to power promising to punish the rich bastards and make them pay. Funny how the rich bastards pay less tax in NZ than they would pay in Aussie yet the battlers pay more tax here than they would in Aussie – yep that’s Labour’s version of left wing! The PM gets a bigger payrise each year than these people earn in a year, disgraceful.
February 27th, 2008 at 5:37 pm
Tim we already have the working for families benefit, or is that not working? A more realistic tax structure would be of greater benefit. Anyone who thinks they can raise a family on $12 an hour should be given a lifetime of condoms.
February 27th, 2008 at 5:38 pm
The Labour market in this country is very tight at the moment. If the workers are unhappy with their lot in life why do they not seek employment that pays them what they believe they are worth. Or better still put their arse on the line and try selfemployment. Most people in life start at the bottom of the heap and work their way up. I belonged to an union in Aussie and it seem to be a constant game of who could screw who with those that did the actual work stuck in the middle and paying both ways.
February 27th, 2008 at 5:39 pm
Tim, I’ve seen the people who negotiate on behalf on unions, and if the guy I used to know is any indication then unions are very violent indeed.
This particular gentleman did no work, and in fact those he was supposed to help were terrified of him. He was a compulsive liar too.
Christine Clark died on an illegal picket line after she was tripped up by an illegal sign at the same time as a very frightened man drove away from those who were threatening him bodily harm. She also had no business being there anyway, since she was not even involved in the dispute. Please excuse me if I find this example just a little pathetic.
February 27th, 2008 at 5:40 pm
Yes, a 6% pay-rise for workers with families really is a pittance. Because Labour’s working For Families package means that with welfare abatement they have ridiculously high marginal tax rates, and therefore they probably only see 2% of that 6%. Much better to give them an across-the-board tax cut, and get rid of high marginal tax rates and working for families.
February 27th, 2008 at 5:42 pm
If I get a part time job at Bunnings can I get 1000 shares for $1. That would be superb. The 6% to Kiwisaver is also impressive – I would have thought the govt would be lauding it. After all it encourages savings not spending.
February 27th, 2008 at 5:42 pm
If thats you’re definition of poor then you’re damn right they shouldn’t. If you can barely afford to look after yourself you DONT need children.
What ever happened to personal responsibility ?
“The recent increases in the minimum wage were the biggest pay increases some workers like cleaners and public hospital workers have had in 20 years. That’s shameful.”
In a country that provides so much state assistance, including but not limited to interest free student loans the shameful thing is actually BEING a minimum wage-cleaner for 20 years.
February 27th, 2008 at 5:44 pm
Scrubone, your prejudice, based on such narrow experience (“if the guy I used to know is any indication”) is laughable.
I knew a businessman once who turned out to be a crook – you reckon they might all be corrupt and criminal?
February 27th, 2008 at 5:46 pm
dale: there lies the problem, anyone who thinks they can raise a family on $12/hr can’t possibly comprehend the directions for properly applying a condom.
February 27th, 2008 at 5:53 pm
Tim / Tane
Please tell me when you put all your worth and more on the line to take the risk and run a business employing staff and what was your experience.
No you comment from a great height about employers and how much they fuck their workers. If you had even the brain cell of slug ( no disrespect to slugs) then you would know that MOST employers value their staff and look after them.
Explain why that Union picket line dick head who went mad with a loud speaker months ago has not seen the inside of a cell.
Your comments show that you have a very limited view of how the world actually works and to continue with the crap you are pushing only reinforces your low IQ level.
Get a real job and experience life away from the settled life of a union offical or under worked public servant.
Now I feel better !!
February 27th, 2008 at 5:56 pm
What I want to know is are the Bunnings workers paid minimum wage in Aussie? If they are then it’s not Bunnings fault that NZ legislates such a low minimum wage. Otherwise, Bunnings still have some explaining to do.
February 27th, 2008 at 6:02 pm
I knew a businessman once who turned out to be a crook – you reckon they might all be corrupt and criminal?
you seem to think they are, you shallow little cretin.
February 27th, 2008 at 6:03 pm
Burt,I hope you dont work for a Chinese company.
February 27th, 2008 at 6:14 pm
Dale
With the FTA coal is where it’s at now. Send in them big machines, get that black gold out of the ground and on a ship to China… Coalminers, unions, it’s gonna be happy days again in NZ… Now who knows a bit about shipping so we can get this stuff to China ASAP?
February 27th, 2008 at 6:16 pm
That only a little over 300 out of 2400 workers at Bunnings have chosen to join the union speaks for itself.
If this line of business is so profitable and the Union Bosses know all about the business, why don’t they set up in competition to Bunnings, pay the wages they think should be paid and lure the workers across instead of interfering in and disrupting Bunnings business.
Living off the workers union fees and squawking from the sidelines is apparently an easier option for these outspoken leeches and pariahs than running a real life business.
February 27th, 2008 at 6:20 pm
“So you think it’s moronic to say it is hard to raise a family on $12 per hour, even with the whopping extra $28 per week before tax provided by a 6.4% increase? It’s not a lot of money.”
No, it isnt a lot of money. But inflation only goes up 2-4% a year. It isnt a lot of money either. Using your logic there shouldnt be any Cost of Living adjustments to wages until affodability has decreased by 20%.
“If he’s trying to justify his position in negotiations then he should say what Bunnings has offered as part of those negotiations. He doesn’t.”
He isnt.
“Why don’t you tell me how a CEO is worth 240 times more than a worker and justifies a $6m salary? Asking me to try to figure out why makes me think that you have no arguments in support of your position, only rhetoric.”
You havent even tried, that much is obvious. All I am asking you to do is START thinking about the situation. I will give you a little push in the right direction. A single worker spends an hour lifting bags of cement closer to the trade gate. They just started with the company so they get the most menial jobs. This action makes it easier for people to buy cement and increases their likelihood of doing so by 5%. The worker has to share the credit for this increase in company value, with everyone else involved in the process, including the manager who saw the opportunity in the first place.
Now lets say that THAT manager was following an order from the district manager to sell more cement as they had a large surplus at the main depot. And the district manager was following an order from the Director of XYZ to clear some inventory.
At the top of that line is the CEO.
Now multiply by employees and hours in the day, week, month and year.
February 27th, 2008 at 6:28 pm
I was talking to a woman at a 40th on Sat night. She exports products from NZ and runs offices in Wellington & Brisbane and is currently setting up an office in London. As well as being incredibly attractive she also had her head pretty well screwed on business wise. We discussed the wage differential, and she was able to provide direct comparisons in NZ, Aussie and Euro’s for the same job. Really there is little reason to live in NZ apart from lifestyle, family & friends. It seems the only way to make a small fortune in NZ is to start with an even bigger fortune. Hard work pays scant reward with low salaries and high taxes. Pity the leftards only want to talk about low salaries when comparing take home pay.
Has anyone done a take home pay comparison for 40 hours work at $12/hr in NZ vs $19/hr in Aussie?
February 27th, 2008 at 6:30 pm
Fukineh! Bout time the westcoasters got a break! If they want it and we got it lets make some money! Now your gettin it Burt. Supply and demand. All those unionised unhappy Bunnings workers got some place to go now. Yep down a big fukin hole in the ground.
February 27th, 2008 at 6:35 pm
“Farfetched and PaulL, the wages for people in these industries don’t increase with experience (unless there’s a CEA in place).”
Bullshit.
“The recent increases in the minimum wage were the biggest pay increases some workers like cleaners and public hospital workers have had in 20 years.”
Bullshit.
“That’s shameful. People with 20 years’ experience still earn the minimum wage in these industries.”
I am sure there are people with 20-years experience that are on the minimum wage somewhere. As a general rule though… Bullshit.
I think that about covers it.
February 27th, 2008 at 6:35 pm
I’m sorry but if you don’t like your job or pay then resign and go and work somewhere else.
That’s why these people only get $12/hr because they struggle with even the most basic concepts.
February 27th, 2008 at 6:36 pm
Dale
Bingo! Look I can’t accept crowing about record low unemployment from the same people moaning about people paying the legal minimum wage. If the labour market is so fricken boyant then why are these people staying at Bunnings. If it’s because it’s the only place that will employ them then we have an issue with the legal minimum wage, not Bunnings, who at least gives the people a job when clearly they can’t earn any more elsewhere.
February 27th, 2008 at 6:37 pm
Don’t you ever mention “Hard work pays scant reward with low salaries and high taxes” to someone like FLG Tane.
His socialist outlook will ask for higher wages and even higher taxes for the “rich”. That’s the mentality and the policies of envy that rule today’s New Zealand. People like him live in a permanent state of envy of others more talented, more resourceful, and wealthier.
The FLG Tanes of this world and their desire for mediocrity must be removed from political power.
February 27th, 2008 at 6:42 pm
What I want to know is why 20% of the staff did not buy $1000 worth of share for $1. Bet they vote Liarbour.
I sending my CV to Bunnings tomorrow to get a part time job and the moment I have paid the $1 for $1000 shares I’m off.
Any other takers?
Some years ago I worked for an outfit with about 1300 staff who paid approx. $300k in Union levies. What they got for that because ours was a good employer was 2 union staff for 1 week at collective negotiation time. We all know where the spare cash was send don’t we Liarbour?
February 27th, 2008 at 6:52 pm
I have to admit a bias here. I’ve worked as a paid full-time shop steward. Simply put, I don’t believe the union without evidence, because my experience leads me to conclude that whereas the employer usually tries to be honest, unions don’t.
February 27th, 2008 at 7:06 pm
I agree Grant. The problem with joining a union when you start a new job is that you are automatically taking the negative position that your company is a bad employer. Even if you are getting a good deal the union will put things in a bad light.
Also its always a coincidence that the lazy and moaning pricks are always the unions members and the hard workers not.
This whole crap about getting rid of the youth wage is just bullshit as well. Its called earning your stripes.
Hell I started working Saturday mornings at 8 years old and all I got was a McDonalds combo.
February 27th, 2008 at 7:07 pm
Also has everyone else noticed that all the union spoke people you see on TV in the last couple of years are always foreigners?
February 27th, 2008 at 7:17 pm
I was just thinking about my silly little example of the new worker moving some cement. Did he earn $12 for doing that? Lets say a 25kg bag of cement is worth $12. Lets assume he moved 50 of the buggers. Thats $600 worth of merchandise. But what was the cost? Lets set it quite low at $6 a bag.
So the profit to the company (before taxes) is $300. It costs them $12 in labour to move the cement, but there are other costs as well. Lets be generous and only increase the cost to $15.
What increase in sales would be required to justify the company forking out $15 for his labour? 5%.
Yay! The company is no better off! The net effect of hiring this guy to do the work is zero. So why employ him in the first place? This is even after ignoring that he has to share that 5%.
Sure he didnt get employed to do this ONE thing, sure there are many other factors that I havent addressed, sure he doesnt have much control over the poor choices of his employers, sure the outcome was impossible to know before the fact, sure companies may intentionally make a loss on new employees if their value is likely to increase over time. But if you lot arent willing to factor these sorts of unknowns in your calculation of what a CEO deserves to be paid, I dont see why I should do it too.
February 27th, 2008 at 7:23 pm
We,re sing off the same song sheet Burt. The next time I hear Helen and Michael say that Austrslia is digging all its wealth out of the ground thats why their doing so well, Im gonna scream! In todays Herald there is an advert for unskilled workers wanted for in and around the mines in Western Australia at top rates. If Labour are serious about growing our economy lets do the same, after all we have atleast 1000 years of coal to live on and export. Note to Jannet Fitsimons living in your tree on the Coromandel Im quite sure we will find other ways of creating energy and goods before the 1000 years is up.
February 27th, 2008 at 7:25 pm
Kimble
Some here think Bunnings owes them a job and a six figure salary, just for being a union member.
Personally, I never shop there. So problem solved – I’m not supporting other peoples poor choices. I also bet all the lefties crying into their Chardonnay don’t tip the staff at Bunnings when they go there for a bargain.
February 27th, 2008 at 7:25 pm
This is nothing but militant Marxist wreckers at work. In the NZ context, Bunnings is a good employer and needs to be compared with what SIMILAR businesses IN NZ pay their workers. Australia is a wealthier, higher-wage, higher-living-cost country, and what they pay their workers over there is no effing business of the NZ Trade Unions.
You couldn’t expect any multinational companies to pay USA wages in India. The contrast between Aussie and NZ is not so great, but the principle is the same.
February 27th, 2008 at 7:54 pm
What else would you expext from Liar Harre?
February 27th, 2008 at 8:05 pm
I’m aware that all New Zealand’s full sevice banks offer a share participation scheme to all employees, based on company performance – of the registered banks with a retail network I think only Kiwibank doesn’t.
People I know who’ve been in the scheme for about ten years talk of parcels worth several tens of thousands.
February 27th, 2008 at 8:11 pm
Michael E
Kiwibank has no need to offer shares, it’s already the peoples bank!
February 27th, 2008 at 8:21 pm
The pimply little shits should be thankful they’re not charged for the privilege of working there, really. Ungrateful bastards. Typical “liarbore” voters to the core – they want flogging, every one of them…
February 27th, 2008 at 8:38 pm
“This is nothing but militant Marxist wreckers at work.”
If you ever needed an example of the economic ignorance and witlessness of the left, you couldn’t get a better one than the most recent post on KBB. What amazingly clueless little wankers they are. To think such fuckwits write stuff there that absolutely reeks of their omnipotent self important correctness, when its so fucken ignorant and immature and wrong its laughable. Is there ever anything more detached from reality than these half educated doctrinal leftist baboons?? What the hell is an education system when it churns out such desperate illiterates??
February 27th, 2008 at 8:57 pm
“The pimply little shits should be thankful they’re not charged for the privilege of working there, really. Ungrateful bastards. Typical “liarbore” voters to the core – they want flogging, every one of them…”
What’s up dipshit? That smug delusion of moral and intellectual superiority getting a little hard to maintain these days? How sad.
February 27th, 2008 at 9:11 pm
DPF
I would like to withdraw the comment I made the other day about the “karma”system being stupid.
I now think its great.
It shows random visitors just how pathetically partisan your regular readers are.
I would also like to applaud you for your own method of judging each comment on its own merit.
February 27th, 2008 at 9:20 pm
200 out of 2400 don’t want to sell their labour for what is presumably the going rate?
Ok, they don’t have to.
An 8% reduction in Bs staff should boost the bottom line big time next fin year.
The 200 then have the opportunity to sell their labour for whatever price they want in the market place.
Win,win.
February 27th, 2008 at 9:29 pm
Yeah S,S&STTL I tend to agree. Certainly at times – some might argue most times – the likes of Tane make unsubstantiated, partisan statements (as do others from the right, but that’s not germane to this…). But in this thread, for instance, his arguments are reasoned. Yet they’re getting worse karma than some of his comments yesterday obliquely implying John Key was planning to lower wages, for instance.
Surely the idea of handing out karma ought to be to reward a rational comment as well as to disapprove of an irrational one. But there does seem to be an element of “Ooo look, it’s so-and-so, I’ll hit the downward pointing thumb” without taking into account the content of what’s being said. Not by everyone, but by enough people to start making Kiwibloggers look like a bunch who won’t entertain a reasonable opposing argument.
Thing is, the comments that are made generally belie this. In other words, the people who actually participate – at least when identifiable, albeit under aliases in the main – don’t respond irrationally.
So perhaps it’s the “random visitors” who are clicking… err… randomly. Or perhaps we all pretend at gentlemanly (and ladylike) debate, then start forthing at the mouth and thinking “I’ll fix him…” when allocating karma
Alright, I’ll wait to be called an appeaser and a Quisling by the usual suspects now I suppose. *sigh*
February 27th, 2008 at 9:42 pm
Tane said “I knew a businessman once who turned out to be a crook – you reckon they might all be corrupt and criminal?”
Since you are unlikely to find anyone with business acumen in the Labour camp to enable you to answer that question, why don’t you ask your uber-capitalist mate Owen Glenn that question?
Or does he not return Labour’s phone calls anymore?
Farfetched pitched it accurately in their statements above.
February 27th, 2008 at 9:56 pm
“Scrubone, your prejudice, based on such narrow experience (”if the guy I used to know is any indication”) is laughable.
I knew a businessman once who turned out to be a crook – you reckon they might all be corrupt and criminal?”
Tane, I note neither you or anyone else has condemned the unions who threaten violence and intimidation, or protect abusive and/or useless workers. All you can say is “I didn’t see it. I also see other people who share the same prejudice as I do, for similar reasons – they’ve seen the evidence with their own eyes. As for my experience, I choose not to share it all at this time, I guess you’ll just have to assume that’s the only story I have of others acting as a “collective” on behalf of the workers.
Yes, there are crooks in all sorts of areas of life, but too many seem to end up using the union movement to shield them from accountability. There was no reason for the guy I knew to be a negotiator – there were paid employees to do that. Why did they take such a man and involve him?
Further, I condemn any business man who takes what is not rightfully his. If this man you knew was indeed a crook, I would condemn that. Will you condemn the illegal and immoral actions of the union movement?
February 27th, 2008 at 10:43 pm
Well this is pretty full on. So let me be balanced. On the one hand, I think Tane has some good points. On the other hand, if the workers don’t like it, why don’t they band together, leave, and set up their own company. Then they could see how much they think management is really worth.
And if you think that entrenched market advantage and capital prevents simple folk taking on the big guys, then all I have to say to you is Youtube, Google, Microsoft, Walmart, The Warehouse, Katmandu, and Virgin.
So is entrepreneurship, and management, worth anything then?
February 27th, 2008 at 10:57 pm
I often wonder what would happen if unions were routinely exposed to the same scrutiny that they demand from employers. Does anyone know for example the salaries of the top union officials? If not, why not? Do they publish accounts showing all their membership numbers, income sources, investments, deductions, donations, expenses. If not, why not?
When you read about things like the betrayal of the UAW against their own members, I wonder if unions don’t trade on their reputation as unquestioned champions of worker’s rights, and I wonder how they’d react if their intentions and motivations were questioned using exactly the language and arguments as they use against an employer with whom they’re in dispute.
February 27th, 2008 at 10:58 pm
It seems to me there is value coming from both parties here.
The Union managed to get negotiations opened, or so the story goes. The company itself has come back with what appears to be a good offer. Do not underestimate the value of those shares. While it does not add dollars and cents to the monthly bottom line, it is wealth and an investment.
There is a tremendous amount of value in even planting that seed, because it helps lead somebody from being on the minimum wage to the next step. I see that as the most positive aspect of this entire thing. Because it helps engender more loyalty, a greater feeling of ownership in the workplace and is a strong motivator. The type of thing which leads people into upskilling and so forth.
I also do not see anything wrong with offering those employees that are not Union members a simple “Thank you” type of reward like the pizza for actually working. It’s not the type of thing that will grossly advantage those employees over their union buddies, but it also shows them that the company appreciates the derision / threats / discomfort they have to go through just to do the jobs they might depend on! Why would anyone find fault with this unless they believe that Unions are the be all and end all and are simply there to be obeyed?
Still, it’s good to see that there are some companies that do take care of their employees and offer them smart rewards.
February 27th, 2008 at 11:11 pm
Much earlier Tim noted, while referring to the Bunnings CEO’s income:
Well, it so happens that I paid a hospital bill just a few hours ago (ouch!), so I can provide some hard numbers here. The operation was carried out by a specialist pediatric urologist (not a brain surgeon – but possibly in the ballpark) in private practice. Time spent in theatre was about 45 minutes. The bill is broken down:
Hospital charge (operating theatre time): $588
Anaesthetist: $800
Surgeon’s charge: $3500
Do the math. This doctor was fully booked.
That’s a hell of a lot more than minimum wage, but I wouldn’t let a minimum-wage worker operate on my kids. 240 of them working together would not make them any smarter or more qualified. Same goes for being CEO I guess.
My point is: these “earns X times more than Y” “CEO vs. worker” salary comparisons are meaningless. Stick to comparing Bunnings workers to other unqualified workers in similar jobs and industries in NZ. Might not look so bad after all.
February 27th, 2008 at 11:33 pm
The whole “management is overpaid” meme comes quite a bit from Tane and friends. Apparently managers get a salary that is globally competitive, and “workers” don’t. So, I see this as a demand and supply question.
Managers are in demand, anyone can tell you it’s hard to get a good manager for any position. And they are paid what it takes to hire them and to retain them. The demand for managers is controlled to some extent by the salary – you can only afford to pay so much to a manager. The managers are either employees, in which case company profits, shareholders and directors limit how much you can pay them, or are entrepreneurs, in which case the money they make is limited by how many other people are prepared to become an entrepreneur in competition to them.
Similarly, good “workers” are hard to get, and they are typically paid what it takes to hire them and retain them. The demand for good workers is pretty much unlimited, just about any company that I have come across has consistently said they would hire more people if they could be sure that those people would be good performers. The problem is how they can be sure the people are good workers. The supply of good workers is limited by the number of people who want the job at the pay you offer. Most companies I come across are also prepared to pay a bit more for the good staff – they have some sort of merit pay, promotions, manager programme or whatever. You have to pay good workers enough to stop them from deciding to become entrepreneurs – so if the difference in remuneration between an entrepreneur and a worker gets too big, the workers start to become entrepreneurs.
However, bad “workers” are easy to get, and the supply seems endless. Bad workers are worth pretty much nothing, in some cases less than nothing, so the demand is very low. Market rules say that the pay for a bad worker should be zero, in reality it is the minimum wage.
If people are concerned about how much they get paid, perhaps they need to take a look at whether they are a good worker or a bad worker. Or if they are concerned that entrepreneurs and managers get paid too much, maybe they need to think about becoming one. If they don’t want to become one, despite the obviously higher pay, they perhaps need to consider why that is. And then stop whinging about it, because they have the same opportunity to do that as the next person, their choice not to do it means that it obviously isn’t that great a deal.
February 27th, 2008 at 11:53 pm
I have just returned from a working holiday in Sydney, working for the same global hospitality company I work for part time while studying in Wellington. Here in Wellington I’m a “team leader” and get paid $14.00 an hour while in Sydney I was at bottom of the ladder, starting on $18 increasing to $20 after midnight, then on Saturdays $20 an hour increasing to $22 after midnight, Sundays $22 an hour. Subsequently I got a data entry job with a government department paying $22.00 an hour. All of this had the Aus Super % added on top of the hourly rate. I think what the union should really be saying is for its members to move across the ditch!! Wages are certainly better in Oz, it’s getting to the stage where students don’t just move after they graduate but before, working there during the summer holidays. I love NZ but sadly it’s really hard to contemplate a future here when three hours away the money is so much better. We are really turning into what Mexico is to the USA.
February 27th, 2008 at 11:54 pm
A brief comment, if I may, on staff share schemes. The Warehouse was (at least in New Zealand, to my knowledge) an early pioneer of the concept:
http://www.thewarehouse.co.nz/Content.aspx?id=100001237
Meanwhile, at Kiwiblogblog, Wat Tyler proudly puts his/her economic illiteracy on display:
http://kiwiblogblog.wordpress.com/2008/02/27/bunnings-hop/
Goodness – where to start with this nonsense?
(1) We’re presumably talking about Wesfarmers shares. Anyone who follows the ASX will know that Wesfarmers isn’t a scooby-doo stock. It also happens to be a highly liquid stock, meaning the shares can be sold freely (less brokerage and other transaction costs). That’s a bonus that a staff member can realise at a time of his/her choosing.
(2) We’re presumably also talking about $1000 of Wesfarmers shares for $1. That is a tangible benefit, however one cares to dress it up. Wat Tyler is insinuating it costs the company nothing to issue shares to its staff – a lie, if for no other reason that it affects the debt/equity balance that is central to the company’s debt financing covenants.
(3) Wat Tyler would apparently prefer a topsy-turvey model: the employees have a controlling stake and everyone else just sucks it up. That’s an impressive application of Orwellian Animal Farm. It’s also unreal. It leaves no room for executive remuneration plans (surely ‘at-risk’ remuneration tied to company performance is an incentive), or for that matter, substantial public participation.
(4) In any event, we’re expected to swallow the line that staff in Bunnings (a subsidiary of a larger company) should have a controlling stake in the parent company. Try finding support for that in the financial markets. The shares would become illiquid overnight – then Wat Tyler would have an example of a bonus that will never be realised.
(5) Then we have this practical issue: it’d insulate the company against takeover threats. The market for corporate control is, at least in theory, a stick over the heads of incompetent management. If they don’t ship up, the shareholders turf them out.
All this is, frankly, bloody rich – coming as it does from a blog that pronounces this:
See post “Not an economist neither” on February 21, 2008 by mardypants
February 27th, 2008 at 11:57 pm
It is interesting that they pay much more than the minimum wage in Australia ($13.89) at $18, but little more than the minimum wage here.
In 2006 – the country with the highest minimum wage in relation to the average wage was Ireland – 52%. Australia was at 47%. With our minimum wage increasing from $7 in 1999 to $12, the comparative % is going up in New Zealand too.
Most employers like to pay their workers something beyond the minimum wage, so its a surprise Bunnings seems to want to keep it at $12, with this soon becoming the minimum. It seems they are campaigning for holding the minimum wage at $12, one wonders if this is part of a wider business strategy.
Parties on the left might consider, a campaign to match their minimum wage (via statute) by increasing the minimum wage here $1pa – it would still the best part of a decade to do so. Meanwhile the unions could seek to at least match the Australian minimum wage in their awards.
That as well as matching their no tax on the first $6000 would establish pay and income parity at one level at least. It’s about the only area where government can ensure it. The other of course, is those working for the public sector.
February 28th, 2008 at 12:13 am
SPC:
I think this policy would risk encouraging a perverse outcome. What you appear to be advocating is legislatively pegging New Zealand’s minimum wage to Australia’s. Now if Australia and New Zealand are indistinguishable, in respect of a major (but necessary) business expense, then a rational business would look at other comparative data. They may even be sufficiently prompted to adopt Australia’s minimum wage by relocating there.
February 28th, 2008 at 5:26 am
Those shareholder employees wil not get any imputation credits on their dividends.
If Bunnings were as good as they profess to be they would follow the example of Nuplex, and make trans tasman franking and imputation credits available to N.Z. shareholders.
February 28th, 2008 at 5:44 am
So, let me think about this for a minute. You get paid slightly more than minimum wage at bunnings. but you also get shares in the company. This allows a direct eturn for your efforts. If you make the company more profitable, your own personal wealth increases, as does the company’s wealth, which, conceivably, will allow you to be paid more, probably by way of promotion, seniority, wage increases and so on. Seems perfecly reasonable to me.
Of course, all the union sees in dollars and cents in the pockets of 200 of it’s members. It is their continued short sighted in this and so many other issues that has rapidly made unions in this country a bit of an anacronism. Had they moved with th times and acted more as advocates for the workers, and less a ersatz political party, they may find themselves less the political irrelevancy they are now. I agree there is a place for organisations that protect the rights of the worker, but in this country, they go too far.
February 28th, 2008 at 5:56 am
Regarding the ratio of highest paid to lowest paid in a corporate, I have worked in a lot of corporates during my career and I have seen both good and bad management at all levels. Funny how the salary is the same for both very good and very poor managers. The thing that irks me about current executive remuneration is that excellent management is not rocket science. Good senior management talent is actually not that rare. The fantasy that an NZ corporate needs to pay astronomical salaries to attract talent has now become a self-fulfilling prophecy, but it’s come about as a result of being talked up by vested interests, much as has happened in the real estate market. It’s now so wide-spread throughout senior and middle-management that it’s too late to reverse it, but are senior execs or senior professionals really worth $1m+ p.a.?
Take the doctor example above, or lawyers, which is my favourite example. Greg King last year got I think $1m+ in legal aid alone. Sure it’s a skilled job, but it’s not rocket science.
The ratio between lowest and highest paid in corporates has significantly blown out since the 80′s, prompting backlash from some surprising sources. Notwithstanding the fact that it’s the market price, I ask myself, has the skill of management correspondingly increased. Of course not, and yet just look at the salaries paid to CEOs of the companies now suffering from the foreseeable sub-prime issue. I saw it coming two years ago, so did many others. Why didn’t the million dollar executives? Duh.
Sometimes, the market doesn’t work: i.e. it does not produce value for money. Current levels of executive remuneration is one of those times.
February 28th, 2008 at 8:06 am
SPC: Most employers like to pay their workers something beyond the minimum wage, so its a surprise Bunnings seems to want to keep it at $12, with this soon becoming the minimum.
However, consider that they pay their employees far more in wealth generating measures; giving them incentives to save, invest and build personal wealth. If you only look at the share offer, that bumps their average (Assuming they work a full year, no holidays) wage up to $12.50. Throw in the additional 6% on Kiwisaver?
And already it’s something beyond the minimum wage, but something that will generate much more wealth in the long term for those employees and help raise them out of poverty.
February 28th, 2008 at 9:41 am
I’m not trying to be critical of all employers, I’m trying to critique the statement from the Bunnings manager. I don’t prescribe to the view that wealth is a vice and poverty is a virtue, but I do believe that workers deserve a fair go, which they’re not getting from Bunnings, and I’ve explained my reasons why earlier.
Unions are accountable. They are not-for-profit incorporated societies where members have a democratic voice. Compare this to a company. Shareholders don’t get to vote on who the CEO is, which political party the company donates to or what decisions the company makes.
Fair enough, there are some bad apples in unions, as there are in business, but modern unions realise the need to move away from the table-thumping of the past. I agree people should be free to join a union or not, a union has no use for grudging or inactive members and it undermines freedom of association. Modern unions use quite different tactics from the days of compulsory unionism and I think you’ll find unions are becoming more relevant, not less relevant.
Raffles, you had a rant, you didn’t make an argument. The only person whose intelligence you are insulting is your own.
February 28th, 2008 at 9:44 am
I’m not trying to be critical of all employers, I’m trying to critique the statement from the Bunnings manager. I don’t prescribe to the view that wealth is a vice and poverty is a virtue, but I do believe that workers deserve a fair go, which they’re not getting from Bunnings, and I’ve explained my reasons why earlier.
Unions are accountable. They are not-for-profit incorporated societies where members have a democratic voice. Compare this to a company. Shareholders don’t get to vote on who the CEO is, which political party the company donates to or what decisions the company makes.
Fair enough, there are some bad apples in unions, as there are in business, but modern unions realise the need to move away from the table-thumping of the past. I agree people should be free to join a union or not, a union has no use for grudging or inactive members and it undermines freedom of association. Modern unions use quite different tactics from the days of compulsory unionism and I think you’ll find unions are becoming more relevant, not less relevant.
Raffles, you had a rant, you didn’t make an argument. The only person whose (limited) intelligence you are insulting is your own.
February 28th, 2008 at 10:09 am
Tim Says:
February 27th, 2008 at 5:29 pm
If you don’t want to join a union, fine, but then you shouldn’t expect the benefits of the Minimum Wage Act, the Wages Protection Act, the Holidays Act or any other form of legal protection for workers (as these were all lobbied for by unions), and don’t expect to get union negotiated pay rises passed on to you.
This is about the most ridiculous thing i have ever heard!
Using this line of thinking then if you’re a member of a union you shouldn’t be entitled to tax cuts, you’d be happy for your kids to pay exorbitant uni fees (due to large pay increases for lecturers etc), and most other things the unions have campiagned against. Union members would also all be stuck on low wages that treat everyone’s productivity and performance as the same, whereas those of us who are actually productive would earn higher wages, and the difference to non union members would be substantially in their favour i’d suggest, also union numbers would drop as those with some talent would leave to get the better wages offered to non union members, and only useless non performers would be left as union members meaning their union (or should that be labour party) dues go up to spread the costs over fewer members.
So come on Tim, stop spouting crap, leave the union office & try working well at a real job.
And for bunnings offering $1000 worth of shares for a dollar, anyone with half a brain would take that offer, think of it as an investment for your retirement or your kids uni fees. Who cares its not cash in hand every week, get another job and prove you have some skills to earn more! And the 6% kiwisaver contribution, take it and save for your retirement, because as soon as a party says they’ll scrap super for over 65′s i’ll vote for it, and so will an increasing number of us younger generation, why should baby boomers get free almost everything throughout their lives (uni etc), where we have to pay for it & then expect us to foot the bill for them too when their old. Anyone who’s over 40 now and believes we will, your dreaming.
And again as others have said, use a condom, or if your too dumb to use one then don’t have sex, you wont have babies, and youu won’t have to support them on the minimum wage. Why should other taxpayers have to support your poor choices? I have a young child and i don’t expect others to foot his bill, why should i? it was my choice to have him, and if i want more then i have to earn enough to pay for the privilege.
February 28th, 2008 at 10:29 am
CEO remuneration is an interesting topic because there are so many things going on. CEO’s are technically employees, but they have morphed into quasi-owners. The real owners want someone in charge who has the same goals that they have. So they offer huge bonuses based on stock price to align their goals.
Then there is the ‘status’ thing. The owners of the company (or at least the board) feel they must pay their CEO based upon the size of the company. Bigger company, bigger salary.
Also, there is a mismatch in information and power. The CEO is the most powerful employee a company has (for whatever reasons) and has much more power to negotiate a larger salary.
All these Lefty bleaters see is the extra zero’s and then cry about inequality and demand CEO’s be paid accoridng to some socialist valuation.
February 28th, 2008 at 10:33 am
This is an outrage! How can Bunnings get away with paying every single worker $12 an hour??!??!
February 28th, 2008 at 4:55 pm
Reid, if these managers are so overpaid, management talent is so common, and you are so hard done by then:
1. Why don’t you get a manager job? Or are you already one of these overpaid managers?
2. Why don’t you start a company, and pay your managers much less. Clearly there are a whole pile of people out there just waiting to be managers, with all the requisite talent, that the evil corporates must be overlooking. Your company, without the bloated pay packets and incompetent management of those other companies will make a fortune. You’ll be rich before you know it.
Once you finish writing your comment explaining why you don’t do this, take a look back at it and ask yourself if that reason is also the reason these people get paid so much.