One of the justifications for large CEO salaries is that their positions are vulnerable – they can be fired by the Board for pretty much any reason, or no reason at all.
The ability of the Board to hire and fire the CEO is a critical component of corporate governance which otherwise would reduce the accountability of the CEO to the Board.
Christine Holgate, the former CEO of Australia Post – who had a salary of $2.6 million per annum – is claiming that she was illegally terminated by the Australia Post Board acting under pressure by the Australian Government over gifts of Cartier watches.
Holgate claims she was ‘bullied’ and in testimony to the Parliament today said
And I think if you read that note and I apologise in advance, that it is rambling and it is rambling because I was seriously ill, I was on temazepam.
I was suicidal. You know? That’s why it was rambling. Simon Birmingham and I used to co-chair the trade board together so I knew him independently of his role as Minister for Finance and that’s why I sought his help.
He had just been made the head of the Senate, and so I wrote to him and said ‘Surely, now that you’re Minister for Finance, Minister of trade and head of the Senate, you will help me get a resolution and stop what’s happening to me’. I just asked to be treated with respect.
Now I think there was a gross overreaction in relation to the Cartier watch bonuses. You may recall at the time that the Prime Minister was under pressure from Labor to do something about Holgate. He did, perhaps not his best day. A better approach to the Labor attack would have been to simply say that the CEO is accountable to the Board and that the Board and the CEO are accountable to the Parliament and that questions about the legitimacy of the gifts should be made during a hearing by Senate Estimates.
But it is troubling if CEOs start using the mental health card to avoid being pushed out by the Board. We are in the era of the celebrity victim and the CEO victim which is, frankly, absurd. Meghan Markle claims she was bullied by her staff. Holgate claims she was bullied by the Australia Post Chair – they are rich enough to manage it themselves and they are not victims by any measure.