Naked CEO gets golden arse, anger mushrooms

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Not before time:

CPA Australia’s controversial chief executive Alex Malley has been sacked, effective immediately.

CPA’s board released a statement late on Friday evening announcing the decision, and that Mr Malley will receive termination benefits of $4.9 million.

“Alex’s legacy is an organisation with a global footprint and an ambitious outlook,” president Jim Dickson said. “We know that he will be very much missed by his colleagues and friends”.

That’s why he’s been sacked, not. More

Rebel members, who have been seeking change at CPA, welcomed the move to sack Mr Malley but questioned the size of his payout.

“I am very pleased that Alex Malley will leave CPA Australia because of the perceived damage that his leadership has caused to my professional body,” said Marcia O’Neill, a fellow of the CPA who is a former board member and former Victorian divisional president.

“It is still unclear what the terms of his departure are and I am aghast at the figure of $4.9 million. Member will be very concerned about this as it indicates that those five long-standing board members who remain seem to have not tackled this issue in the way the membership has sought.”

Ms O’Neill called for Mr Malley to stand down after his $1.79 million pay packet was revealed in The Australian Financial Review at the end of May.

“I look forward to ASIC progressing their investigation with the forensic accountants working through all of the accusations that have been aired in the press, particularly the area the directors fiduciary responsibilities,” she said.

He’s certainly done his bit for defrocking the avaricious CEO. Now the anger has swung to the board:

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The sacking of CPA Australia CEO Alex Malley has failed to quell member anger at the nation’s biggest accounting association, with new calls for the remaining board directors to stand down over their decision to give him a $4.9 million golden parachute.

CPA continues to refuse to respond to calls for an extraordinary general meeting so that members could have a say on the make-up of any refreshed board and provide input into changing the body’s opaque governance rules and decisions on what to do about the troubled CPA Australia Advice arm.

Members are incensed that CPA chair Jim Dickson issued a statement late on Friday announcing the board had “terminated Alex’s contract” while praising Mr Malley’s performance and giving him a multimillion-dollar exit payment “in accordance with our obligations”.

Employment experts have labelled the payout as “extremely unusual”. If the CPA was a public company the payment would breach Corporation Act changes which limit payouts to CEOs to one year’s base pay.

And there are more problems for Malley’s disruption:

The unprofitable financial planning business left at CPA Australia by Alex Malley appears to be in breach of a new federal law, and one of its own planners expressed doubt the operation would last the year.

Under the law that created the Financial Adviser Standard & Ethics Authority, financial planning businesses aren’t allowed to monitor their own compliance with an industry code of conduct.

CPA Australia is the only industry group in Australia to carry out the dual functions of licensing its own financial planners and being legally responsible for monitoring the behaviour of its members.

The Coalition government is concerned that unless something changes the organisation will be violating the law, which was introduced by the Minister for Revenue and Financial Services, Kelly O’Dwyer.

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The Malley rort may be shaping as existential threat to the CPA here. Rebels must reform the organisation to return it some credibility. But they can’t do it without a horribly long, bloody and brand destroying legal battle to restore governance and claw back the payout.

Such is life under the Naked CEO.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.