Prime Minister Malcolm Turnbull is being urged to consider greater transparency around executive salaries and greater powers for shareholders, after widespread outrage over Australia Post boss Ahmed Fahour's $5.6 million pay packet.
Mr Turnbull, a long-time critic of executive remuneration and advocate for increased shareholder powers, used a radio interview on Friday to slam the "cult" of excessive executive salaries, and said "a lot" of chief executives were overpaid.
"I think there are lot of corporate CEOs, by the way, that are overpaid," the Prime Minister told Melbourne's 3AW. "I think it has become almost a cult of excessive executive, CEO remuneration."
When opposition leader in 2008, Mr Turnbull campaigned for a binding vote for shareholders that would allow them to determine in advance the amount of money a board of directors could pay itself and company executives.
At the outset of the global financial crisis, he told Parliament Australians were "appalled" by the level of executive salaries and were "even more astonished that shareholders' opinions can be ignored".
Britain has a binding vote system in place every three years and Conservative Party Prime Minister Theresa May is now advancing plans to make it annual for some or all companies.
Edward John, executive manager of governance at the Australian Council of Superannuation Investors, said a binding vote "should be considered among other options as part of a wide-ranging review" of the rules around executive pay.
"It's hard to find a magic bullet but we'd certainly welcome a debate on what tools are available to investors," he said. "I think many investors would welcome [the Prime Minister's] sentiments."
Dean Paatsch, director of governance advisers Ownership Matters, said shareholders would welcome "parliamentary attention" on the issue and "more effective powers to curb executive pay".
Shareholder activist Stephen Mayne, a director of the Australian Shareholders' Association, said he was comfortable with current regulations around executive pay, particularly the "two-strike" rule introduced by Labor in 2011.
But he called for greater transparency around salaries in the public sector. "He [the PM] needs to fix the inadequate disclosures around public sector pay," Mr Mayne said. "Otherwise he's all talk, no action."
Australia Post originally tried to conceal Mr Fahour's salary over fears of "unwarranted media attention", but was forced to reveal the figure before a Senate committee this week.
It is now expected Australia Post chairman John Stanhope will face a grilling over the salaries of numerous postal executives at a Senate estimates hearing later this month.
Mr Turnbull agreed his friend Mr Fahour should "take a pay cut", as suggested by 3AW radio host Neil Mitchell, because his salary at $4.4 million plus bonuses was "far too high" for the job.
"I think that would be a good thing for Ahmed to do," he said. "I think Ahmed should step back and say, here in 2017, in an economy where a lot of people are doing it pretty hard, where budgets are tight, this is too much to be paid as CEO of a government owned-postal company."
Elizabeth Proust, chairman of the Australian Institute of Company Directors, said Australia was competing in a global marketplace and it was "not a surprise that salaries are larger than they were".
But she conceded there was an onus on boards to be more transparent and explain how they earned their bonuses.
"There's a problem in that short-term incentives have effectively become part of the remuneration rather than something that has to be earned," she said.
