CPA Australia CEO Alex Malley has defended his $1.8m pay packet which was unveiled in CPA Australia’s latest disclosure document, as well as countering contreversies over CPA Australia’s subsidiary, CPA Advice.
Malley was paid $1.78m last year, three times more than the Australian Prime Minister Malcolm Turnbull and according to some professionals, well above peers at other organisations. His pay packet included a fixed pay of $1.37m, $345,600 in bonus money, $35,000 in superannuation, and $38,300 in benefits.
Operating officer Jeff Hughes collected $902,000 and company secretary Adam Awty $950,000. Chairman Tyrone Carlin earned $184,000 last year, even though he assumed presidency in October, revealed the document. Chairman Carlin has since left his position.
In a broadcasted interview on The Business, a TV show by the Australian Broadcasting Corporation (ABC), Malley was rigorously questioned and asked why $1.8m for a CEO of a not for profit membership organisation was appropriate, to which Malley said that “salaries are all based on performance, they are also based on your competitor’s size and globally how you fit in the marketplace.”
Malley said that the pay disclosure was voluntary, more detailed than required, more than what its competitors provide and that pay packets are in line with expectations from external consultants. CPA Australia has argued that as an organisation with a turnover of $180m per year, it shouldn’t be compared to other accounting bodies.
Brett Stevenson, a dissident member of CPA Australia, said the rank and file have lost patience with Malley. He wrote to the Australian Securities and Investments Commission (ASIC) chairman Greg Medcraft, asking him to investigate the “unconscionable delay” in providing the numbers. Stevenson said Malley was in “a league of his own in terms of remuneration excess”, earning more than double the CEO of rival accounting group CAANZ and that the board needed to go.
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CPA Australia sent its members a 32 page document on 31 May detailing the pay of its senior staff following months of questioning from its members. According to TV show The Business, disenfranchised CPA members had been trying to get this information for months.
Malley dismissed the argument against him and CPA Australia, pointing out that a website run by disgruntled members is registered in Iceland and contains posts from anonymous people, and therefore should not be taken seriously. Members who are part of the website group told The Business it was registered in Iceland as the only way members could air problems with the organisation without being sued. Also, unlike traditional member-based organisations, CPA Australia does not allow its constituents to oust directors through a vote.
TV show The Business pointed out that current membership figures are 160,000 members according to CPA Australia documents, with an increase stated of 45,000 in four years. However, Malley was outed over CPA documents from four years ago which contradicted that statement, revealing 144,000 members, just a 16,000 increase meaning 29,000 members must have quit.
Malley responded “We stand by our figures, they are recorded and are public. We have had an increase of that size and we have recorded it in several different ways and we are comfortable with that reporting. We also have 98.3% in retention rates of people.”
He went on to say that over the past 10 years the organisation had recorded no material concerns from members, until this year when a small number of members asked some questions about the accounts. "All of a sudden it became a very large issue," he said.
When asked why an overall number was given and not the breakdown of what is paid to the board like rival CEO Chartered Accountants ANZ Lee White has done, Malley called it an inappropriate question and provided an explanation of his rivals discrepancy. “It’s very clear to anyone in the profession that we all report in a similar way,” he said.
It has also been revealed that senior staff at CPA Australia are paid extra for working with subsidiary CPA Advice such as president and chairman Carlin receiving $70,000 from CPA Advice on top of his $390,000 salary.
CPA Advice has been funded $12.4m in the last six months by CPA Australia and Malley justified this even though there have only been 25 accredited members in 2 years.
“Absolutely it is [money well spent],” he said. “We made a record $9.5m surplus last year, despite investing in an organisation that is a complete start up and our closest competitor made a loss.” CPA Australia has raised $60m in surplus in eight years, which Malley said is excellent.
Malley added: “We opened the doors with the ASIC Chairman, Greg Medcraft, who was very decent with us. There is a real public interest issue going on here and accountants have to move with the times. We have adjusted pricing [for CPA Advice] to make it more attractive for members to use. But if you are asking me if there is a price on public interest, there isn’t.”
An Australian professional talking to The Accountant in confidence said that salary figures however high they were are down to the responsibility of the organisation and how much it wants to pay its employee. However that particular professional raised concerns over a lack of turn around in the senior positions. “I think that is more troublesome,” the professional said. “At some point you need fresh blood, new profile and background to bring new ideas.”