The Australian’s George Megalogenis became the latest journalist to associate Malcolm Turnbull with the global financial meltdown on Friday night when he said this on Lateline:
And the other thing that Malcolm Turnbull does have working against him is what his background is. The least popular person in the world at the moment is a merchant banker and if Malcolm Turnbull’s looking for people’s attention… he may need to disown the people he grew up with, the people he made a lot of money with before he gets the electorate’s attention.
The Australian’s business editor Andrew Main also produced this story on Friday implying Turnbull’s fortune was somewhat ill-gotten.
This characterisation of Turnbull’s career and wealth is quite unfair. In Main’s case, he appear to carry a grudge as The AFR was once sued for defamation by the alternative PM in the ACT Supreme court after Main opined that he was a “sociopath”.
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Spending four years running Goldman Sachs Australia does not make Turnbull a career investment banker in the overpaid risk-taking mould that brought down the global financial system.
The complete Turnbull CV includes many more years as a journalist, barrister, general counsel, corporate adviser, private investor, professional director, civic campaigner, honorary fund raiser and now politician.
Besides, Goldman Sachs was the Wall Street investment bank which best avoided the sub-prime contagion and Turnbull left before the great credit boom even started.
Whilst it looks terrible that US Treasury Secretary Hank Paulson made more than $1 billion over a career at Goldman Sachs, Turnbull’s substantive career as a “merchant banker” was through his own boutique corporate advisory.
Turnbull & Partners was not in the business of high risk trading or dodgy products such as CDOs. It was simply a paid adviser on deals such as the sale of Channel Ten and Fairfax.
Stronger arguments can be made against Turnbull on the grounds of past business associations with the likes of Trevor Kennedy and Rodney Adler.
Indeed, advising Adler when he sold that can of worms called FAI to HIH Insurance is still before the courts and it was never a good look to chair a company clear felling old growth forests in the Solomon Islands.
One thing that definitely shouldn’t stick to Turnbull is this idea that he was ever paid excessively by a public company.
His biggest pay day of $60 million ($38 million after the whopping $22 million capital gain tax bill was paid) came when Ozemail was sold to WorldCom for $520 in 1999 before the dotcom bubble burst.
Turnbull told Fran Kelly this morning that he has long been appalled by excessive executive pay and even once sued the Fairfax board in 1992 for issuing themselves $1 options when the stock was trading at $1.50. Who else can claim that?
Here is one simply policy to cement Turnbull’s record in this regard: propose a change to the Corporations Law that requires shareholder approval for all executive payouts exceeding $1 million.
*Check out this list tracking the most outrageous executive payouts in recent Australian corporate history.