Crikey yesterday published a strong attack by Adam Schwab on Dawn
Robertson’s $2.68 million salary in 2004-05 when Myer reported a 46%
drop in earnings to $39 million for the year. Fair enough, although
Coles Myer does need some management stability as it offloads the
struggling department store chain.

The contrast with the 19% increase in EBIT by David Jones to $78
million was stark indeed, but should the DJs boss potentially earn even more
than Coles Myer CEO John Fletcher over the next three years?

McInnes saw his pay packet soar from $1.8 million in 2003-04 to $3 million last year and, as this SMH piece explains, he’s been tied up until 2008 on a very rewarding contract that could easily deliver $5 million a year.

However, don’t expect the DJs remuneration report or the four specific
resolutions on McInnes and finance director Stephen Goddard to be voted
down at the AGM on December 2.

You see, there is currently a lot of private equity money sloshing about
desperately looking for capable retail executives. With a long line of
suitors lining up to take on Myer, McInnes and his finance director
Stephen Goddard would be hot property for every syndicate.

David Jones was absolutely right to lock in their two gun
executives on
generous and long term deals. If they walked, shares in DJs would tank
when they’ve delivered outstanding share price performance to get the
stock up from $1.10 in June 2003 to $2.42 this morning. Check out the
David Jones annual report and notice of meeting for yourself here.

You only have to look at the big price of $212 million that two private equity firms
paid for the struggling discount variety chains run by Miller’s Retail
and The Warehouse Group yesterday to get a sense of the wall of money
that needs to be married with executive talent.

In this case it is former hardware chain builder and current Warehouse
Group CEO Ian Tsicalas who will run the combined operation with a big
equity play. He’ll no doubt be hoping he can match the rumoured $14
million that former Mayne hospitals boss Robert Cooke took out of the
private equity ownership of that business before it eventually passed
to Ramsay Healthcare.

The same goes for Just Group CEO Howard McDonald, JB Hi Fi’s Richard
Uechtritz and Pacific Brands boss Paul Moore, although all three have
stuck around to build on their private equity riches after their
businesses were floated.