BossWatch News – 26/02

Our debut weekly round-up on who's in bed with who, how much they're paying and who else they're sleeping with. This week, Qantas rakes it in, NAB pays big failure, liquidators back worker entitlement rights and emerging ethical challenges for companies doing business in South Africa.

Profits: Qantas Soars But Cries Poor

Despite the negative lines from the Qantas spin-doctors the aviation giant was smiling after pocketing a $125 million profit for the first half of the financial year. While this was down on its pre-September 11 aviation prognosis, it's still a nice little earner for shareholders. Contrast this to the current treatment for staff where the "grave situation' means that management has offered a 'wage freeze' with a straight face. That and more staff - both cabin crew and maintenance - hired from countries without Australia's hard-fought for wages and conditions. If that's not enough, Qantas CEO Geoff Dixon is now pushing for a relaxation of foreign ownership safeguards on the former public asset. After all, if you're planning to base your staff in low wage ghettoes, you may as well raise some capital there too!

Executive Pay: Directors NAB rewards for Failure

More details of the NAB's HomeFund debacle which saw three executives paid nearly seven million dollars in bonuses - despite presiding over a $4 billion corporate collapse. The SMH reported that documents filed in the US this month show the three HomeSide executives hired by NAB collected the payouts despite the bank's November promise to halve performance payments to senior executives as punishment for the US debacle. The Finance Sector Union has highlighted the Homeside payouts as an example of executive bonuses that are spiraling out of control and with no connection to performance. In contrast, NAB workers are struggling to win a modest pay rise. US companies have proven a minefield for Australian companies: Lend Lease Corporation last year disclosed a $15 million payment to the head of its US real estate investment business who lasted less than one year in her position.

Workers Rights: Liquidators Back Entitlements Push

Australia's peak liquidating body has backed union calls for money to cover employee entitlements to be set aside in case the company goes bust. While the Insolvency Practitioners Association of Australia (IPAA) wasn't exactly singing 'Solidarity Forever' it did say the up-front provision was preferable to a government proposal to place employees ahead of other creditors. IPAA president Michael Dwyer said the Howard legislation could prevent banks lending companies money in the first place. He suggested that companies put aside money for annual leave and redundancy payments for employees, in a secure fund. Unions are championing a trust-fund arrangement, with Manusafe the most viable existing model.

Ethics: Baggage Attached to South African Assets

With several Australian companies teaming with South African outfits, the ramifications of making money from a country where the wealth and privilege is so starkly split along colonial lines is coming home to roost. Ethical Investor magazine reports this week that BHP-Biliton that the company could face liabilities for disease allegedly cused by the operations of predecessor Gencor Ltd. Meanwhile, Normandy shareholders who sold into the AngloGold bid are being confronted with a safety report that has an annual fatally toll over more than 40. The different standards to safety, workers rights and the environment may make doing business in South Africa profitable, but shareholders must wonder whether there is any blood on their hands.