CPA CEO Alex Malley
An epic six-month solo effort by The Australian Financial Review’s enfant terrible, Joe Aston, has led to a tidal wave of disgust flowing towards CPA boss, Alex Malley. Last Friday, the AFR splashed across its front page that Malley was paid $1.79 million last year to administer CPA Australia, a membership group of accountants with only 460 staff. That’s more than three times what the Prime Minister of Australia is paid. To make matters worse, Malley’s fellow executives, Adam Awty and Jeff Hughes each took home more than $900,000 each last year. This made the CPA executive team, which employs a relatively tiny number of staff, one of the highest paid in the country.
For those who haven’t followed the CPA debauchery, here’s a brief summary of what has happened, largely driven by Aston, who probably deserves a Walkey for his continued efforts in exposing the grubby dealings of the CPA (with help from a dedicated group of CPA members who have risked legal action from the very organisation they pay to be members of).
Rather than being a senior accountant, or seasoned executive, Malley arrived at the CPA after serving as an accounting lecturer at Macquarie University (Malley’s CPA biography and his LinkedIn profile strangely omit any employment history before his current role). As Aston discovered, Malley’s academic career was shrouded in controversy after he resigned after being accused of “serious misconduct”, though he was eventually allowed to resign without any finding of wrongdoing. Malley was alleged to have directed hundreds of his students to purchase private paid modules from a website called Edextreme. The university received complaints that stated students who used the resources from Edextreme were provided bonus marks by Malley. Funnily enough, Edextreme was 50% owned by none other than Malley’s wife, Rachel Malley. Rachel Malley, perhaps conveniently, registered the business under her maiden name, Wilson.
But having little experience didn’t stop Malley from burrowing his way into the CPA, along with a cabal of like-minded bedfellows. After leaving Macquarie University in dubious circumstances, Malley somehow popped up at the Urological Society of Australia, the peak organisation for urologists in Australia and New Zealand. Funnily, the same organisation former CPA ally Tyrone Carlin is also a director of.
In 2007, Malley was appointed as the president of CPA. When he was appointed president, the CPA’s constitution was changed to increase the president’s salary by 50%. Within two years, Malley was appointed to CEO of the CPA (in a role that Aston claimed was never advertised). Who was appointed President of CPA replacing Malley? None other than Malley’s former colleague at Macquarie University, Richard Petty. Petty also happens to be chair of the CPA’s remuneration committee, which determines Malley’s salary.
Also on the CPA board is Graeme Wade, another Malley colleague who is also the chairman of the Larry Kestelman-owned National Basketball League. The CPA for some reason sponsors the NBL (and would have to be one of the only professional membership organisations that feels the need to sponsor a sporting competition).
As Malley grew comfortable in his CPA fiefdom, the money certainly flowed his way, and not just a world-bearing salary. CPA paid upwards of $35,000 an episode to Nine to exhibit a 30 minute show which involves Malley interviewing the likes of Fonzie from Happy Days and former gymnast, Nadia Comaneci. Exactly how this benefits CPA members is a mystery, but they are picking up the tab for this embarrassing piece of alleged journalism. Malley is also a best-selling author, penning a book called The Naked CEO. You may have heard of it, possibly because the CPA allegedly spent more than $170,000 per month of its members fees on billboards promoting the thing.
However, the self-promotion eventually gained the ire of a small cohort of CPA members, as well as Aston, who started questioning the operations of the organisation. As the pressure mounted, the CPA, an organisation that prides itself on corporate governance, moved its 2017 AGM to Singapore, presumably to avoid questions from pesky members. The gambit appeared to temporarily pay off, but the release of remuneration details appears to have been a bridge to far.
Last week, long-time Malley ally, Tyrone Carlin, quit his role as president of the CPA (he had only held the role since October and, before then, was a CPA director). Carlin’s role had become as untenable as Malley’s given he was paid a pro-rated $390,000 last year — an impressive achievement given Carlin is employed full time by the University of Sydney as its deputy vice-chancellor and was not permitted by the university to work more than one day a week in other roles. Assuming Carlin didn’t breach his university contract, his effective full-time equivalent salary to be president of a small, member organisation was $1.95 million — more than the chairman of virtually every Australian public company.
Being a seasoned media professional, Malley last week got on the front foot and was interviewed by the ABC’s The Business program. Defending his impressive salary, Malley told the ABC: “salaries are all based on performance first of all. They’re also based on your competitors’ size and globally how you fit the marketplace.” Yet Malley’s performance as head of the CPA has been mediocre. His major key performance indicator, membership in the organisation, has grown from only 144,000 in 2012 to 160,000 currently — basically tracking the general level of population growth (and far lower than Malley’s clearly confused claims on member growth). Meanwhile, two-year old subsidiary CPA Australia Advice (which appears to be based on the laudable aim of providing independent financial advice), has managed to lose $12 million in less than two years, while generating revenue of only $44,000. In that time, it paid staff (including Malley), $3.8 million.
While calls grow for Malley’s resignation, the actions of Malley and the CPA board (filled with luminaries like former Liberal communications minister, Richard Alston) appears to warrant an ASIC investigation as to whether any breaches of directors’ duties have occurred. The alleged actions of Malley and the CPA directors appear at best to represent a breach of their obligation to CPA members — and, at worst, to be tantamount to theft of member monies. Crikey contacted ASIC this morning to confirm whether they will investigate Malley and the CPA board for possible breaches of the Corporations Act. Greg Medcraft who publicly stood beside Malley at the launch of the money-losing CPA Australia Advice is no doubt familiar with the organisation. ASIC refused to comment on any issues surrounding the CPA.
*Adam Schwab is the author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed, published by John Wiley & Sons in 2010, and in 2015 was featured by the CPA’s In the Black magazine as one Australia’s “best and brightest” young business leaders