The Control Instinct

NZ Finance Minister, Bill English, is reported as staying that the Westpac Bank “should front up to its customers and explain why it is paying its New Zealand boss a record $5.59 million”.

Really? Do we really need the Government trying to decide what individuals in the private sector are worth? Do we require other companies to justify their employees’ salaries to their customers? As the Herald points out, the Westpac CEO’s salary is not the highest in the country and is broadly consistent with what CEOs of other large companies in NZ are paid.

Do Westpac’s customers feel they are getting a raw deal from the bank? Are many of them switching to other banks because of it? Is the Westpac board dissatisfied with the value they get from their CEO? Are the shareholders complaining? If Mr English thinks there is a problem with the value customers are getting from the bank, is he really saying that NZ does not have a competitive banking sector? Why is that?

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