Part of the reason that executives are paid so much is because of their ability to make their jobs sound far more complicated and difficult than they actually are. The most common line spun by directors and remuneration consultants is that to run a large (ASX Top 100) Australian company, a CEO needs to be paid upwards of $5 million, this is party because these jobs are so difficult that none of Australia’s 21 million inhabitants have the ability to undertake them.

While one expects such comments from the Australian Institute of Company Directors (whose primary role appears to be maximising executive remuneration) it is somewhat concerning when the usually astute Minister for Financial Services, Chris Bowen, follows a similar theme. Bowen told the ABC yesterday that “there’s a balance to be struck…the Australian people quite rightly are concerned about very high termination payouts in particular, but we also need to keep the system competitive to ensure that executives find Australia an attractive place to work.”

It is difficult to know if Bowen was referring to attracting foreign executives to Australia, or preventing the leakage of executives overseas — but in either case, his comments contradict reality.

Foreign executives not only tend to be poor at running Australian companies, but they are also very expensive for shareholders. Former Telstra-CEO, Sol Trujillo, whose Wyoming bluster led to frequent run-ins with Government and regulators, would leave Telstra’s share price 30% lower (for his trouble, Trujillo collected more than $40 million). American George Trumbull almost killed AMP with sheer incompetence (whilst being paid $20 million) and Sir CK Chow at Brambles lost the plot and several million pallets before being shown the door.

Confident South African, Brian Gilbertson, undertook a reverse takeover of BHP but was terminated after trying to takeover Rio but forgetting to ask his board, taking $10 million for his time. Welshman Paul Anthony was paid $17 million for working just over a year at AGL before being sacked. American Dawn Robertson, former head of Myer, was one of Australia’s highest paid executives despite doing such a terrible job that private equity will probably make several hundred million dollars from a three-year turnaround at the department store.

Based on that — the last thing Australian shareholders should be doing is attracting foreign CEOs — let alone with generous termination payments.

By contrast, if Bowen was concerned that Australian executives relocating to greener pastures overseas unless they were paid millions to run our financial institutions, that too appears wistful. Of the Australians who made it to the top overseas (such as Doug Daft, the late Charlie Bell and Andrew Liveris), they all departed from Australia at a young age and worked their way through the ranks in foreign companies. It is virtually unheard of for an US or UK company to poach an Australian executive.

As for Bowen’s comments that Australia’s strong banking profits have been a benefit to the economy and to stability. While true in a technical sense, it is hardly an achievement by our banking executives, whose companies have gotten fat on charging dubious penalty fees to unsuspecting customers and operating one of the world’s cosiest oligopolies. If that wasn’t enough, last year Bowen’s Federal Labor colleagues provided banks with wholesale funding and deposit guarantees, allowing them to minimise finding costs and destroy non-bank competition. The banks then used those guarantees, as well as other ludicrous policies like the first home owner’s bank to perpetuate Australia’s residential housing bubble and protect the value of their collateral.

Bowen hardly needs to worry about Australian executives, especially banking executives leaving our shores — what other job pays millions of dollars and has performance propped up by unsuspecting taxpayers?