Adam Schwab
Adam Schwab is a commentator, business director, and the co-founder of LuxuryEscapes.com. He is also the author of Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed.
The CEO and board of David Jones are to be commended for their quick and appropriate response to the Mark McInnes scandal. It's a rare example of a large corporation hitting the mark in a corporate governance sense.
While the federal government does its best to quell the booming mining sector, the other boom area, residential housing, appears to be finally losing its froth.
What happens when the smartest guys in the room are shown to be the dumbest? They sue.
Asciano's share price is now 86% less than its June 2007 peak, amid billions of dollars of losses. But the board has decided to not only extend the contract of CEO Mark Rowsthorn but also pay him a "one off" bonus of $900,000.
If Australian banks are no longer able to service their considerable funding costs overseas, then they will not be able to continue to bankroll the bubble. Can the housing bubble burst? You bet.
The top 20 CEOs in Australia (that is, those managing the 20 largest companies), were paid on average 320 times the wage of the lowest-paid workers in the country.
Recent polls indicate that if an election were held now Labor would be swept from office. If politics is like a giant game of rock, paper, scissors, to Kevin Rudd, opinion polls will always beat paper and rock.
Many mining companies may be inefficient and poorly managed, however, unlike banking it is not a sector that generally relies on substantial government assistance.
Australia already has a lower company tax rate than the United States and Japan. And ironically, the only real winners from a reduction in the company tax rate are foreign investors.
As for the current state of the housing market, it appears that the recent rate rises are showing real signs of reversing some of the extraordinary gains of the past 18 months.
