You’d be forgiven for mistaking the opening of Napoleon Perdis’ new boutique for a rave when walking past it on Crown Street, Surry Hills, at 10am on Wednesday.
Despite two floors, the four walls could barely contain dancing guests – including The Real Housewives of Sydney’s Nicole O’Neil and Krissy Marsh, LGBTIQ advocate the Honourable Michael Kirby, and a number of drag queens – who ended up spilling onto the street.
Forget coffee or even mimosas at that time of day, Perdis served champagne to wash down porridge as he celebrated 25 years in the makeup industry and the opening of his 86th store, alongside his bedazzled and bejeweled family, including wife Soula-Marie, daughter and the new face of the business Lianna, 17, and triplets Angelene, Athina, and Alexia, 15.
The family, who live between Athens and Double Bay, had all flown in for the event before jetting back to Europe that evening to get ready for the start of high school after the northern summer break.
Lianna told Fairfax Media that she also used the trip Down Under to partake in a number of photo shoots – the first as a model in her own right outside of the family’s makeup business.
Across town Stylerunner CEO, Julie Stevanja, launched her new range of on-trend activewear New Guard on a rooftop basketball court in Ultimo.
There were no drag queens in sight as guests sipped on flat whites and dined on Mary’s while the retail queen of ‘s activewear scene presented her chic 17-piece collection accompanied by hip-hop dancers.
The range will be sold on the e-commerce site that focuses on fashion-forward sportswear, alongside the 70 other brands Stevanja stocks.
The self-made millionaire, whose business is estimated to be worth $50 million, described the morning as “epic” and thanked “the weather god” for the glorious winter sunshine.
On Tuesday, Firedoor restaurant in Surry Hills was transformed into a cosy English setting, smelling of Robin Hood’s Sherwood Forest in Nottingham, for the launch of Jo Malone London’s the English Oak Collection.
Its lifestyle director Debbie Wild introduced guests, including Kate Waterhouse and Liberty Watson of Sydney-based label Watson X Watson, to two new fragrances that can be worn alone or mixed together.
All that was missing from the “quintessentially British” afternoon were the Merry Men.
Following its successful run at the Sydney Opera House, Julie Andrew’s production of My Fair Lady has returned to Sydney, this time at the Capitol Theatre.
Amid a rainstorm on Sunday evening, former MP Bronwyn Bishop walked the opening night’s red carpet, along with Nine’s Sylvia Jeffreys, who took her father as her date, and Seven’s Kylie Gillies, who brought her mother.
Downton Abbey star Charles Edwards plays Professor Higgins and the Helpmann Award-winning Anna O’Byrne stars as Eliza Doolittle.
Romeu Iximaw????teri Yanomami (behind the camera) and?? Silvano Ironasiteri Yanomami to his right, organise Yanomami children for a video shoot. Romeu Iximaw????teri Yanomami (behind the camera) and Silvano Ironasiteri Yanomami to his right, organise Yanomami children for a video shoot.
From left,?? Ricardo Pukimapiweiteri Yanomami, Silvano Ironasiteri Yanomami and?? F????bio Iximaw????teri Yanomami work on their audio visual skills.??
“The white people come here to take images and do not show them back to us,” says Octavio Yanomami from the Marauia River, where the Brazilian Amazon forest licks the Venezuelan border, as he holds a camera for the first time.
A simple Google search with the keyword “Yanomami” shows more than 50,000 results for videos alone, many of them produced, distributed and commercialised without proper consent or benefit to this indigenous group, often erroneously romanticised around the world as the “last primitive” people of the Amazon.
The Yanomami are native to the northern parts of the Brazilian Amazon forest and the southern parts of the Venezuelan Amazon and are threatened by white people’s diseases and invasion of their traditional and legally protected territories by gold miners, loggers, hunters and cattle farmers.
“Along with white people, the problems arrived. Many negative impacts. With this equipment, we have autonomy,” says Octavio, who is the coordinator of the Xapono Media Centre created to convey the impact of development on the richest ecosystem on the planet.
“It will help us become more proficient, but also as a weapon to denounce, to have proof against invaders and to register our history and our fight.” /**/
Last month, the Brazilian army dismantled a massive clandestine gold prospecting operation on Yanomami land housing around 1000 people. The illegal venture, one of many, generated revenues of around 35 million reais ($12.8 million) a month, the army said.
Illegal gold mining has been taking place on Yanomami land for decades, despite numerous campaigns and laws protecting their territory. Not much has changed since 1990, when Prince Charles described their suffering as collective genocide.
“We have no illusion. We know these [gold diggers] will establish themselves in another place,” General Gustavo Dutra said, referring to Brazilian authorities’ inability to monitor the country’s vast and open borders.
Gold mining heavily pollutes the pristine Amazonian rivers and contaminates their fish with mercury. A 2014-2016 study by the Oswaldo Cruz Foundation, which works with the Health Ministry and not-for-profits in Brazil, found mercury contamination in 92 per cent of Yanomami people sampled in 19 villages. Mercury is a highly toxic metal used in gold mining that leads to loss of vision, heart disease and other cognitive and motor impairments. It can cause birth defects.
The Yanomami people came to the attention of the English-speaking world in the late 1960s, when Western anthropologists such as the controversial Napoleon Chagnon depicted them as “the last major primitive tribe left in the Amazon basin, and the last such people anywhere on Earth” living “in a state of chronic warfare”. Such accounts were contested by other anthropologists and the indigenous peoples themselves.
Along with Trobriand Islanders, the Nuer and the Navajo – who became shared points of reference in anthropological textbooks – the Yanomami needed to learn and tolerate the presence of foreigners, with their cameras, recorders and interpretation of culture. But now they are trying to take back control over their own stories.
The Xapono Media Centre seeks to counter misrepresentations and misappropriation of Yanomami image rights and give a voice to the people.
“The Yanomami have a peculiar way of representing us white people, but they also need the means to tell their own struggles,” says Frenchwoman Anne Ballester Soares, who organised the workshops.
Soares has lived among the Yanomami since 1994, organising publications in their language. She believes the Yanomami will be better off communicating autonomously.
“They are not free to express themselves and yet they have so much to tell. Indigenous health is worsening due to misuse of funding. Their own healing methods are not respected and there are new threats from mining prospects … they want to be able to resist,” she says.
Using crowdfunding, the media centre is running two workshops to teach the indigenous community how to use audio and video capture and editing, how to best use language, presentation and analysis as well as scriptwriting, post-production, compression formats and broadcast media.
“We are developing ethnic media to speak from an indigenous aesthetic. The Yanomami have a distinctive way of seeing the world, their vision is educated in different ways,” says Daiara Tukano, radio reporter of the indigenous online station, Radio Yande.
She tells Fairfax Media that apart from independent initiatives, different indigenous peoples are getting together to reflect on their place in the world and develop strategies for survival.
“We are trying to break with the Eurocentric ways of seeing native peoples by showing how dynamic our civilisations are,” she explains.
Shaman and activist Davi Kopenawa Yanomami, co-author of the acclaimed 2013 book The Falling Sky – Words of a Yanomami Shaman, spoke to Fairfax Media over a mobile phone on his way back from visiting neighbouring Roraima to his isolated community further down the Demini River, in the western part of Yanomami territory.
“The Yanomami need to tell their own story to keep Yanomami [culture]. Today is much different from 50 years ago. Today the Yanomami thinking is way too confused. The white men brought diseases, invasion of our land, cutting the forests. They only think of money.”
As a child in the early ’60s, David Kopenawa saw his community wiped out by two successive epidemics of infectious diseases brought by missionaries and government employees. He grew up to condemn the white man’s way.
“They only talk about work or things they want to possess. They live with no joy and get old earlier, always busy and always yearning for new products. Then their hair gets white, they die and the work, that never dies, survives all of them. Then, their children and grandchildren keep doing the same,” he wrote in the book.
Despite adopting the Christian faith, Kopenawa gave it up for what he perceived to be its fanaticism and obsession with sin.
“We will never be white. We refuse to be assimilated. We have our lands and culture. Before we were free to hunt, work, raise children, shamanism,” he tells Fairfax Media.
“The government now wants to oblige us to speak Portuguese, go to school, live in cities. Very complicated. There’s no housing, there’s no one to trust. The government needs to accept our sovereignty, keep loggers, miners and squatters out of our land.”
The interview finishes with a plea: “Please tell the people who the Yanomami are. We are the ones who keep the lungs of the world alive.”
MELBOURNE, AUSTRALIA – August 29 . Kon Karapanagiotidis with blue book of all the people he has helped over the years seek asylum. Asylum Seeker Resource Centre .August 29, 2017 in Melbourne, . (Photo by Darrian Traynor) Minister for Immigration and Border Protection Peter Dutton addresses the media during a doorstop interview at Parliament House in Canberra on Wednesday 16 August 2017. fedpol Photo: Alex Ellinghausen
There are two notebooks. The covers are blue, and worn at the edges. One book is falling apart, the spine held together by tape. Both are 168 pages long, and each contains lists of names, one to a line, numbered and dated.
The first entry, back in 2001, records the name of the first person who sought help from the newly-founded Asylum Seeker Resource Centre. The final entry is numbered 7579. The second book, which starts where the first ended in 2012, is filling up fast.
The number of people who have received assistance from the ASRC is now approaching 15,000. Many have also been assisted by a range of other community and church groups.
Each name represents a story, each name a life, a journey.
Kon Karapanagiotidis, founder and chief executive of the ASRC, flips through the pages of the first book. He lights up at individual names.
“Most of the people named in the first book have received their permanent visas, but this one was forced to leave,” he says sadly. “This one has been reunited with family and is thriving. That one has started a business that employs many workers.”
The people named in the second book tell a different story.
Most remain on various forms of temporary visa. To understand their predicament requires a shift from names to statistics. Many are among a group of about 24,500 asylum seekers, who arrived by boat in between August 13, 2012, and July 18, 2013.
“Their lives are on hold, subject to arbitrary policy changes,” says Karapanagiotidis. “They are caught up in a nightmare. Some may be deported in the short term, and others may have to wait for years, if ever, before receiving permanent protection.”
Early this week, the Department of Immigration and Border Protection, as directed by its minister, Peter Dutton, signalled yet another shift in policy. The new visa affects up to 410 asylum seekers who have been transferred to from Nauru and Manus Island at various times since 2013 – for medical treatment, mental health issues, to give birth or accompany sick loved ones. Some of the transferred women had been raped on Nauru. The group includes 50 babies, 66 children, single men and women, and families.
Known as the “Final Departure Bridging E Visa”, the first 65 recipients were summoned to the offices of the department and told they will lose their accommodation within three weeks and be immediately cut off from basic services.
“The aim is to make them destitute,” says Karapanagiotidis, “and make conditions so difficult that they will be forced back to Manus Island and Nauru, and returned to danger, the scene of their trauma.”
On Monday morning, he called a meeting of staff to discuss this latest crisis. Even though the centre’s resources are stretched well beyond its limits, the staff immediately agreed to take on the cases of asylum seekers affected by the new visa.
“We have accompanied some of them to the department’s offices. We’ve also tried to find at least one person willing to tell their story,” says Kon. “They are confused, and too terrified. They fear they will be punished if they go public. They finally felt at home here, and had a chance to breath freely, make new friends, and regain trust. They had found a safe space to tell their story, face to face, with empathetic listeners. Now this. They are shattered.
“The big story is that we cannot hear their story now. Worse still, they have been robbed of their stories and had them distorted. The minister has smeared them as con artists and fabricators, and accused them of robbing pensioners.
“They have been turned into ghosts. It is terrifying.”
There has been one saving grace. Since the ASRC, and other community groups, posted details of the new visa on social media, the public response has been overwhelming. Many have expressed outrage and offered rooms for individuals, accommodation for entire families. Sanctuary. Others have offered employment, material aid, or contributed to the emergency appeal set up to help those affected. Donated 2 weeks housing to @ASRC1 bc despite what Dutton says, my ‘social justice agenda’ as a lawyer is right & moral #[email protected]__K??? Emma (@emmerina) August 30, 2017I just donated @Kon__K because compassion matters and is better than this https://t苏州夜场招聘/a4aoxoyzYX??? tarnya widdicombe (@tarnya_widdi) August 30, 2017
Hotelier and race car driver Rod Salmon has sold his waterfront mansion in Drummoyne for more than $12 million, setting an all-time new high for the inner west.
The three-level residence set at the end of Wrights Point was expected to hit the market in time for the start of the spring this weekend, but after being quietly shopped around in recent weeks by at least three agencies it was sold to a local buyer in an off-market deal.
Salmon, a long-time property developer and hotelier who founded the Skwirk online education company in 2005, bought the waterfront mansion in 2014 from fellow hotelier Sam Arnaout.
Arnaout commissioned the palatial residence following his purchase of the 700-square-metre property in 2007 for $6 million.
Salmon’s purchase in 2014 coincided with his sale of the Wentworth Hotel in Homebush and the One World Bar in Parramatta to Arnaout’s Iris Capital hospitality group.
???The three-level house includes five bedrooms, six bathrooms, a four-car garage, a rooftop terrace, gym, home theatre, swimming pool, separate living area with a wet bar, separate guest apartment and a waterfront lawn that extends to Crown Land and the historic Drummoyne Steps.
Related: Annandale’s freestanding homes demanding a premium Related: Ryan Stokes sells Walsh Bay pad for $7.8 million Related: Cricketer Steve Smith spends $1.95 million in Birchgrove
The Drummoyne record ends the Balmain peninsula’s decades long dominance of the inner west’s top sales records, most recently set at $11.8 million in 2014 by the waterfront house purchase in Balmain East by art collector and heiress Paris Neilson.
The previous inner west high was set at $11.5 million in 2008 when Mark Ainsworth, son of billionaire poker machine maker Len Ainsworth, bought a Gothic-style villa on the waterfront in Birchgrove.
While Sydney’s prestige market hot spots are predominantly in the eastern suburbs and lower north shore, the inner west’s top-end market has proved increasingly bullish in recent years as values and wealth across Sydney have risen in recent years.
Danny Cobden, of Cobden & Hayson in Balmain, said the Balmain peninsula’s high-end shoppers tended to be local buyers, not imports from more affluent areas of Sydney.
“Most of these major prestige sales are to buyers who are already established in this area and the purchase is about trading up in their area of choice,” Cobden said.
“But for your Drummoyne buyers they are often drawing from a broader area, so there are Hunters Hill buyers who will look at Drummoyne who won’t go near Balmain, and visa versa.” The Inner West record setters
1. Wrights Point, Drummoyne
Sold $12 million-plus August 2017
2. Gallimore Avenue, Balmain East
Sold for $11.8 million in 2014.
3. Wharf Road, Birchgrove
Sold for $11.5 million in 2008.
4. Wharf Road, Birchgrove
Sold for $11.1 million in 2009.
This house on Wharf Road comes with a view of the Harbour Bridge. Photo: Supplied5. Chalmers Road, Strathfield
Sold for $8.8 million in May 2017.
Chalmers Road, Strathfield. Photo: SuppliedWoollahra $10.1 million jewel
A handful of high-end home shoppers registered to buy a1930s-era Woollahra mansion on Tuesday night, forcing the sale result well above the initial $8.8 million guide to sell for $10.1 million under the hammer.
But after an opening bid of $8 million it was neuroradiologist Jason Wenderoth who 22 bids later claimed the purchase, ending 45 years of ownership by Margaret Allsopp, of the Angus and Coote jewellery family.
The home on Edgecliff Road in Woollahra. Photo: Supplied The auction was a competitive one among some of the east’s bullish buyers in large part driven by the continued lack of high-end stock on the market. There was no reserve revealed by Gavin Rubinstein, of Ray White Double Bay, but the property was already on the market at $9.9 million.
The five-bedroom, five-bathroom residence with a swimming pool and north-facing views of the harbour is set on a battle-axe block of 825 square metres and was sold with DA-approval to build a second residence.
Allsopp, who bought it in 1972 for $126,000, has meanwhile downsized to a $6 million apartment she bought in Double Bay in May.
Generic auction signThe Sunday Age Domain Photo CATHRYN TREMAIN23 June 2005/cjt050623.001.004 RICHMOND,AUSTRALIA 29 JULY 2017; Auctioneer Richard Impiombato from Delmege O’Shea in action at 42 Stawell St Richmond on Saturday 29 July 2017. Photo Luis Enrique Ascui
‘Tis the season for first-home buyers. At least, that’s what economists are predicting ahead of the first weekend of the spring auction market.
Along with other owner-occupiers, young buyers in the market for their first home are tipped to dominate auctions across the state over the coming months.
Emboldened by stamp duty cuts introduced in winter, they are also expected to face less competition from investors, according to ME Bank’s Patrick Nolan.
“This season will be different from previous years in that we won’t see as much investor activity due to n Prudential Regulation Authority regulations curbing the amount of investor and interest-only loans banks can lend,” Mr Nolan said.
“We think there’s going to be much more opportunity for owner-occupiers to really get in there and compete.”
Domain Group chief economist Andrew Wilson said the strongest part of Melbourne’s auction market was in the budget price range.
“Spring will reveal whether that cut to first-home buyer’s stamp duty has really worked,” he said.
Spring is widely regarded as the best time of year to sell property and, as a result, more properties come onto the market. There are 894 auctions scheduled this weekend, forecast to rise to 1100 by mid-September. Related: Winter auctions up on last yearRelated: Families struggle to climb property ladderRelated: Melbourne’s new bridesmaid suburbs
Traditionally, the biggest auction days over the spring period are the weekends before the AFL grand final and the Melbourne Cup. More than 1400 properties can go under the hammer on these so-called “super Saturdays”.
Middle- and outer ring suburbs have recorded heightened auction activity this year, which is tipped to continue into spring, according to the Real Estate Institute of Victoria.
President Joseph Walton named Craigieburn, Reservoir, Dingley Village and Scoresby among suburbs recording above-average clearance rates.
In the past, auctions were typically only popular in the inner-city but Mr Walton said an increase in buyer appetite meant it was now the norm for properties further afield to sell under the hammer.
“Over the course of the past couple of years, there’s been a real spike in auction activity in the outer suburbs,” he said.
Samantha McCarthy, from Hocking Stuart Werribee, said auctions were not a deterrent in the outer west, where it was still possible to buy a freestanding house for less than $500,000.
“There’s on average five bidders per property in the outer west,” she said.
Ms McCarthy said first-home buyers were often bidding against each other, as well as competing with interstate investors.
“The investors are coming from Sydney; Melbourne is so much more affordable than where they are coming from.”
Dr Wilson said Melbourne had emerged as the strongest auction market in the country, tracking higher clearance rates than Sydney. There were 9868 auctions over winter, with an overall auction clearance rate of 71 per cent.
He expected clearance rates in Melbourne to remain above 70 per cent but said, overall, the market may not perform as well as last spring, when buyers were motivated by recent interest rate cuts.
He said the top end of the market had been an underperformer over winter.
“It’s certainly not as strong as the budget market, particularly the inner east,” he said. “There’s a real sense the [inner-east] market has topped out.”
The Republic of Turkey has been forced to pay a Melbourne builder $693,824 after losing a damages claim over its consul’s palatial $4 million Toorak mansion.
Builder Ralph Mackie, the sole director of the Mackie Group of Companies, won the damages after a 23-day hearing at the Victorian Civil and Administrative Tribunal ended a long-running and costly building dispute.
The spat between Mr Mackie and Turkey arose after the builder was contracted in 2009 to construct a new three-storey home on Toorak Road for the then-Turkish consul general Seyit Mehmet Apak and his wife and young children.
The palatial six-bedroom house had a large reception room on the ground floor, a 25-seat dining room and industrial-scale kitchens to serve eminent guests.
After the residence was finished in 2012, Mr Apak and Turkey alleged it had major defects and took Mr Mackie to both the Supreme and County Court.
The alleged major defects included a draughty roof access skylight, incorrectly installed windows, a defective hydronic heating system and cracked parquetry flooring, some of which were later fixed by Mr Mackie.
The dispute then went to VCAT where Mr Mackie launched a large claim against Turkey for variations and agreed variations to the building contract of $360,000, delay costs of $232,331 and $264,000 in liquidated damages.
Turkey denied liability and filed a counterclaim that joined to the proceedings the Melbourne architecture firm Tectura, who designed the consul’s home.
Tribunal member Robert Davis dismissed Turkey’s counterclaim and required Tectura to pay the Republic $119,664 to help cover Mr Mackie’s damages claim.
A decision on legal costs was reserved and the parties will make submissions on who gets to keep a further $123,641 lodged as security by Mr Mackie.
Mr Mackie told BusinessDay it was unfortunate the dispute had to go to court.
“These disputes are completely unnecessary. It’s important for people to sit down and work them out.”
“We’re lucky to have a judicial system as good as this. You take your grievances to court and get a fair hearing,” he said.
SYDNEY, NEW SOUTH WALES – JANUARY 06: Allan Gray CIO Simon Mawhinney poses for a photo on January 6, 2017 in Sydney, . Fundie (Photo by Brook Mitchell/Fairfax Media) Prime Minister Malcolm Turnbull during a division on the motion to suspend standing orders, at Parliament House in Canberra, on Wednesday 8 February 2017. fedpol Photo: Alex Ellinghausen
The expression “heads I win – tails you lose” neatly sums up the pay experience of a large portion of corporate chief executives.
It’s more than just the quantum of their earnings – the broader community’s response to which has become fever-pitched outrage.
Calling out excessive pay is now the strategy de jour for the likes of politicians. But while Malcolm Turnbull’s reference to executive pay as a “cult” of excess is popular with the electorate, the fact remains that the system needs an overhaul.
But there is a more deeply enmeshed and complex reason that even underperforming executives are being rewarded with pay packets that can border on the obscene.
It’s all about the structure of how management is rewarded with performance-based financial incentives – short- and long-term incentives on top of what is often generous base pay.
Now one of ‘s most influential and outspoken investors, with more than $5 billion under management, Allan Gray, has not only called time on these remuneration practices but has devised an alternative structure.
And it is now pressuring the companies in which it invests to adopt it.
As Allan Gray’s managing director, Simon Mawhinney, sees it, bonuses should be rewarded for past performance. But this is not the case in many major n listed companies, which he says use complicated and opaque scorecards to determine both long and short-term incentives.
These are then paid to executives based on equally complex and often flawed vesting conditions, he believes.
While some more extreme examples of pay have been voted against by shareholders at annual meetings, there are plenty more that slip through because they are too difficult to understand.
Mawhinney says he regularly hears feedback that management places little value on the long-term incentive portion of their remuneration due to difficulties understanding the structure of the rewards and the risks associated with its vesting.
“This is staggering given the cost of these schemes to shareholders. It is quite possible that high base salaries and short-term incentives – often with large cash components – are now used to compensate executives for the risk that their long-term incentives do not vest.
“This results in executive remuneration pay-off profiles that are asymmetrical with little downside.”
In other words, bad outcomes are well remunerated because even if long-term incentives are not paid, the base salaries and short-term incentives are still generous. And if the executive does perform well, he or she will get paid long-term incentives and end up with a huge reward.
So why are short-term incentives paid when outcomes are bad?
One reason is that, all too often, the decisions made by an executive can look good at the time. It is only years later that the strategy blows up – by which time the executive has more often than not left the building, taking their big pay packet with them.
Another reason is that the payment of bonuses doesn’t seem to need a particularly high bar.
A recent report from the n Council of Superannuation Investors (ACSI) noted that even though bonuses should be for exceptional performance, the vast majority of the 83 ASX 100 chief executives included in the study received a bonus last year. The figures also showed that when a CEO was granted a bonus, they were typically paid almost 70 per cent of the maximum amount.
Allan Gray’s model amalgamates all executive bonus incentives into a single bonus scheme – which it calls an executive incentive plan – which among other things eliminates short-term cash bonuses and is easy for shareholders to understand.
The bonuses are made in shares, which are held by the company but not given to the executive for between three and five years.
So if the business performs well over that period, the executive will ultimately be rewarded.
But if the business has not done well and the shares have fallen, the executive will receive less when he/she finally gets access to the stock. In this way, Mawhinney says, the executive is far more closely aligned with the shareholders.
DOMINOS AFR PHOTOGRAPH BY GLENN HUNT 3 NOVEMBER 2006. Don Meij-CEO- Domino s pizza. AFR FIRST USE ONLYOne of the big features of the latest corporate reporting season has been the increasing number of companies releasing their annual reports alongside their results, instead of waiting until September.
It’s all in the name of good governance, and it means investors have been able to compare company earnings with the earnings of chief executives straight away.
It did not always go down well in an environment where even a former Goldman Sachs investment banker turned Prime Minister like Malcolm Turnbull has been forced to lash out at the “cult of excessive executive CEO remuneration”.
At that time, he was referring to Ahmed Fahour’s $5.6 million pay cheque from Post in 2016.
Fahour took the headlines again this reporting season when it was revealed he was paid a jaw-dropping $10.8 million for the year just ended, his last with the company.
But big pay was not the prevailing theme this year. It was the sight of corporate titans donning the sackcloth and ashes for their corporate sins, and sacrificing short-term bonuses. Giving up bonuses
The tone was set early with the release of the Commonwealth Bank’s annual results, less than a week after it was rocked by the Austrac allegations of breaching money laundering rules.
The bank’s chairman, Catherine Livingstone, announced that its CEO Ian Narev and his team would not receive any short-term bonuses.
And these bonuses would have been substantial, thanks to another record earnings result. The executive team are not the only ones suffering. The board has also cut its pay by 20 per cent for this year, all in the name of corporate atonement.
It obviously was not enough for some investors: Livingstone later announced Narev’s plans to retire.
Seven West boss Tim Worner also sacrificed what little bonus he would have received last year – which the board was planning to take anyway after what he discreetly described as “not a stellar year”. The not-so-stellar year included the legal fallout from his affair with former company employee Amber Harrison.
And yet another corporation with a tarnished reputation, Domino’s Pizza, followed this path with CEO, Don Meij, and three senior executives handing back their short-term incentive (STI) payments for last year, with an oblique reference to the pizza chain’s wages scandal.
“They each elected to forgo their incentive entitlement to acknowledge the negative effect of publicity in relation to the franchise network,” the annual report said.
But the real surprising news was that, despite the disappointing financial result, Meij was still expected to pocket $660,000 more than for the previous year.
Domino’s chief Don Meij gave up his short-term bonus – and still ended up $660,000 ahead. Photo: Glenn Hunt’Fixed pay dressed up’ as bonuses
This touches on an issue that the n Council of Superannuation Investors (ACSI) highlighted in a report last week: Why are so many CEOs getting bonuses in the first place?
While fixed pay for the CEOs of ‘s 100 biggest listed companies has remained broadly unchanged over the last decade, 86 per cent of ASX100 CEOs received a bonus in the 2016 financial year, according to the ACSI report.
Given that bonuses are commonly understood to be for “exceptional performance”, ACSI chief Louise Davidson says the finding begs the question, “are these amounts truly at risk?”
“It’s a positive sign for shareholders when boards step in and reduce bonuses to zero,” says ACSI’s head of Governance, Engagement and Policy, Edward John.
But he cautions that it is too early to tell whether the rash of bonus forfeiture represents a new trend, or, if these examples are just outliers.
There is a counter-argument – recently supported by KPMG partner Stephen Walmsley – that the problem is investors believe bonuses should be given for outperformance, while executives regard it as “at risk pay” that you only lose for underperformance.
ACSI is not a fan of this explanation.
“It’s fixed pay dressed up” as bonuses, says John.
Cuts haven’t gone ‘far enough’
But the focus on bonuses is not enough for some. Well-respected investor Peter Morgan still has a problem with the size of the pay packets on offer.
“I don’t think it has gone far enough because it got so high,” says Morgan. Banks should slash their pay levels by 25 to 50 per cent more.
He cites Commbank’s highly-regarded former boss, David Murray, as an example.
Murray took home $2 million in pay and bonuses in 2000. Narev received remuneration totalling $12.3 million in 2016.
And it isn’t just the big banks which have been paying handsomely for their chiefs.
Energy company AGL received a first strike against its remuneration report last year in response to the $6.9 million worth of remuneration handed out to its CEO, Andy Vesey.
He has received the same amount of pay for the financial year just ended. Running oligopolies
Morgan’s main problem is that he thinks local companies are overpaying for CEOs who, for the main part, run entrenched oligopolies – like our energy providers – and cyclical companies where pay turns into a lottery payout for CEOs lucky enough to have caught the upside of a business cycle.
This was exacerbated by the steady flow of investment money from our $2 trillion superannuation savings and the local mindset that “the bigger the company, the more a CEO should be paid,” he says.
But the staid oligopoly mindset might not just be a problem for the companies. The market is not rewarding any CEO who actually tries to take even a moderate amount of risk to grow the business.
Perennial boss John Murray says “the market is brutal, if there is any doubt” – citing the experience of Grant Fenn’s Downer EDI, which had a hard time selling its investors on the merits of the company’s takeover for Spotless.
“This is a brutal market at the moment in terms of how investors are looking at CEOs.”
Rather ironically, Perennial is seeing positives from signs of an executive wage boom in one sector of the market – the mining industry in Perth – which is supporting its view that the miners and mining service providers’ fortunes are turning.
Rio Tinto officially handed over the key to its Hunter Valley coal business on Friday, prompting renewed speculation about what it will do with the proceeds from the $US2.69 billion ($3.5 billion) deal.
The sale of the Coal and Allied business to Yancoal delivered $US2.45 billion in cash to Rio on Friday.
The mining giant also confirmed it received its first royalty payment, of $US10 million, on Friday. And it said a further $US100 million in royalty payments would be received by the end of this year, while “a further $US90 million is expected before the end of 2018”.
Completion of the deal, which happened relatively quickly given Rio shareholders backed the board’s decision to sell to Yancoal only as recently as the end of June, means the cashed-up miner has become even more flush with cash.
Rio pleased its shareholders and the wider market when it announced its half-year results in early August, as it reported underlying earnings of $US3.94 billion ($4.95 billion) for the half-year, and declared an interim dividend of $US1.10 (fully franked).
The signs of the miner’s healthy cash position were clear. The $US1.10 interim dividend was a record interim dividend for the company, which also announced a $US1 billion increase in its share buyback of its London-listed shares.
Asked what Rio would do with its large influx of cash from the Coal and Allied Sale, Morningstar resources analyst Mathew Hodge said: “That’s the $64 million question, isn’t it.”
More debt repayment, and some more money for shareholders, were the two most likely uses for the money, Mr Hodge said.
“I don’t think they’re going to decide to ramp up organic capital expenditure, that would be a bit of a surprise, and an acquisition would be a bit of a surprise too,” he said.
Mr Hodge said he did not expect an out-of-cycle dividend from Rio.
Macquarie analyst Hayden Bairstow said: “The Coal and Allied deal [would] underpin another big buyback through next year, and probably a better final divvy [dividend]. I don’t think it’s any more than that, and I don’t think you’ll get it early.”
In a statement on Friday Rio said the money would be used “for general corporate purposes and the group’s capital allocation framework will be applied”.
Rio didn’t respond to specific questions on Friday from Fairfax Media about how it would use the extra cash.
But in August, in a conference call with analysts, Rio CEO Jean-Sebastien Jacques said that while “shareholders should expect good returns”, Rio would not declare anything until the cash was on the balance sheet and proper process had been followed.
Pressed further on whether Rio would consider “out of cycle returns” and pay a special dividend outside the normal interim and final dividend framework, he said: “The only thing I can say is, clearly, we will have a chat to the board when we get the cash on balance sheet, but I can’t give you any indication about the timetable on this one. But I can tell you for a fact that by February, when we have the board meeting to review the final results, we will have an answer to your question.”
Shares in Rio climbed 44?? on Friday, to close at $68.28.
Power companies would remotely turn down home airconditioners and swimming pool pumps to cut power use on hot summer days in exchange for cash rewards for consumers, under a plan by ‘s energy watchdog.
The n Energy Regulator wants power utilities to increase electricity supply by helping consumers use less, rather than building expensive new poles, wires and other infrastructure and passing the cost on to customers.
Amid soaring power bills, rising greenhouse gas emissions and the risk of blackouts, the regulator this week released a draft plan to give incentives to electricity distributors who manage the power use of consumers.
As well as saving customers money, experts say so-called “demand management” could deliver far more capacity than the Turnbull government’s proposed $2 billion Snowy Hydro expansion.
Chief Scientist Alan Finkel’s review of the national electricity market said “more attention should be paid” to how consumers were rewarded for managing their power demand.
Regulator board member Jim Cox said the plan encouraged power utilities and consumers to “try new and different things”.
“One of the purposes of the scheme is to get some ideas happening, because in the past the networks have simply wanted to build lines rather than manage demand,” he said.
One such idea is “direct load control”, in which consumers give their power utility permission to control their airconditioner at times of peak demand, in exchange for payment.
“[Power companies] may turn down your airconditioner just a little bit, but that does help to reduce the load across the network or in a particular part of the network,” Mr Cox said.
“People might feel that a small change in temperature at peak times is not something that they’d particularly notice, but if done on a large scale would help control demand and might lead to less investment and lower bills.”
Mr Cox said power-hungry swimming pool pumps could also be turned down remotely. Specially enabled appliances that communicate with power companies would be required.
Power companies already exploring such interventions include Queensland’s Energex, which offers cash rewards of up to $400 to homes and businesses that allow remote control of their airconditioners. When the network is under pressure, the appliance drops to a lower performance mode.
Research commissioned by the n Energy Market Commission in 2012 found peak demand reduction could save up to $11.8 billion in national electricity market costs over a decade, potentially cutting up to $500 off an annual household power bill.
UTS Institute for Sustainable Futures research director Chris Dunstan said while off-peak hot water tariffs had long been offered in , nations such as the US had been quicker in adopting other demand-management tools.
He said if matched the US average for managing peak electricity demand, it would deliver about 3000 megawatts of power into the national grid.
The Turnbull government’s Snowy 2.0 scheme will deliver an estimated 2000MW, while Victoria’s recently retired Hazelwood coal fired power station had a 1600MW capacity.
Mr Dunstan said demand management could also involve calling on consumers to run dishwashers and other appliances later at night, when power demand was lower, and encouraging the use of energy efficient devices.
“We’re seeing rising electricity charges, a shift away from coal-fired electricity to renewables, which means we need flexible resources, plus concern about climate change,” he said.
“Without doubt the cheapest, biggest and quickest flexible energy resource is demand management.”
Energy Consumers chief executive Rosemary Sinclair said in the long term, effective demand management could reduce energy system costs, lower prices and “allow consumers to be equal participants in a much more dynamic and responsive market”.
A spokeswoman for Energy Networks , the electricity and gas transmission peak body, said demand management was already in use, and the regulator’s draft scheme would help “promote innovation to benefit customers”. Power by the numbers$11.8 billion – the estimated cost savings to the national electricity market of reducing peak power demand, over the decade to 2022$500 – the maximum potential reduction that would flow to annual household power bills3000MW – the amount of power that could be delivered to the national grid if matched the US average for managing peak electricity demand2000MW – the energy potentially added to the Snowy Hydro scheme under the federal government’s proposed expansion
Sources: n Energy Regulator, n Energy Market Commission, UTS Institute for Sustainable Futures, federal government