November 15, 2003
"I am not driven by greed."
earnt my $12m bonus: Lowy
By Teresa Ooi
BILLIONAIRE Frank Lowy
has defended his $12.38 million bonus and refused
to step down as head of Westfield's remuneration
committee despite growing shareholder
"I am not driven by greed," Australia's third
richest man and highest paid executive told
shareholders at the annual meeting in Sydney
yesterday. "I am driven by what I think is
"I provide two things to the company. I
contribute capital, like you, and I contribute my
labour. I believe I am entitled to be paid for my
labour irrespective of how much of the company I
The Westfield Holdings executive chairman's
contract paid him $13.39 million 2002-03, up from
$11.92 million a year earlier.
It includes a base of $932,000 and a bonus of
$12.38 million this year.
But Mr Lowy defended
his record, saying he headed an international
group of three companies with assets worth $32
billion and a track record of 43 consecutive
"If there is no profit, there is no bonus," he
Lowy announced plans to donate $30 million from his
salary to establish a think tank called the Lowy
Institute for International Affairs.
While that gesture won applause, investors have
been concerned that Mr Lowy heads the Westfield
remuneration committee while holding the title of
highest paid executive in Australia. The News
Corporation Ltd's chairman and chief executive
Rupert Murdoch and chief operating officer
Peter Chernin are paid more, but both are
based in the US.
Giles Edwards of the Australian
Shareholders Association questioned at the meeting
whether there was a conflict of interest for Mr
Lowy to be chairman of the remuneration
"Would it be too much to ask that you simply
absent yourself and have a truly independent
remuneration committee? Otherwise, the perception
in the market is that you are the judge and
executioner of your own salary. And that's not good
business practice," Mr Edwards said.
But Mr Lowy said it was "entirely proper and it
makes good sense" for him to play a key role in
setting pay for senior management.
"I know the executives, I see their performance.
I have worked closely with most of them for several
years. I am able to provide an internal perspective
of senior management while the independent
directors provide an external perspective."
When pressed whether he
should step down from the remuneration committee
in line with good corporate governance, he said:
"There's a binding contract between Westfield
Holdings and myself. The company cannot change
it unilaterally. I have to agree to make a
change. I thought about it long and hard. I got
advice and I decided now I will not change it.
However, given shareholders' discomfort, Mr Lowy
said he would review the matter.
"Having regards to the sentiments, we will
consider it -- and I don't say I will, and I don't
say I won't (step down).
"There is a perception when people talk about
salary that I take so much out of the company.
"It's like my own decision ... we have a very
vibrant and strong board that deals with all issues
and this will be one of the issues the company will
Mr Lowy, who turned 73 last month, also
dismissed any suggestions that he would would
"I want to be in the chair of the company, I
want to leave it a day before I have to.
"I'm doing well, I feel good, I'm strong. I
think I've got my marbles and until I cannot make a
contribution, I'd like to stay ... (I have ) no
plans to retire."
website dossier on the origins of
Lowy has business and political interests in
Israel and is seeking to develop shopping
centres across Britain: a veteran campaigner on
had recently acquired 99-year lease for the
425,000 square foot retail portion of World
Trade Center before the WTC attacks of Sept. 11,
2001 reported The Jerusalem Post on Sept.
donors like Lowy were among the biggest
corporate and individual contributors to party
political funds in 2001 and 2002