It’s a story that’s inescapable for someone like me because what the Reserve Bank Governor gets paid is especially interesting when Michele Bullock and her board refuse to give debt-strapped Australians any interest rate relief. And what she is paid could look excessive, given there are claims that our central bank has failed to beat inflation as well as other central banks.

This raises the question whether her salary is too much, given the job she has done to date. It’s also fair to compare her salary to other leaders in important positions and not the average Aussie who’s on around $1,924 a week or close to $100,000.

News.com.au tells us that Ms Bullock pocketed $1,056,935 for the first three quarters of this year made up of a base salary of $811,108 (for this period) plus entitlements, super payments and long service leave.

Her quarterly base payment is $270,000 (without her entitlements), which ends up being $1,080,000 a year! Her old base salary as Deputy Governor was $716,392 a year.

Let’s face it, running the RBA is an important job but let’s see what other important leaders get paid:

1. Prime Minister: $549,250 is the base salary.
2. Governor General: $709,017.
3. Premier of NSW, Chris Minns: $416,440.
4. New CEO, Vicki Hudson base salary: $1.6 million.
5. CEO of Woolworths, Amanda Bardwell, $2.15 million.
6. Ex-CEO of Qantas, Alan Joyce: $21 million in his final year.

My view isn’t that the RBA Governor is paid too much but relatively speaking the Prime Minister and Premiers of our states are paid too little. These leaders are under constant public attention and are responsible for so many important policies affecting around 26 million people.

The RBA boss is paid less than leaders of top companies and Bullock’s pay looks small compared to Matt Comyn at the CBA, who took home over $10 million in the financial year 2023. As the AFR reported: “Commonwealth Bank boss Matt Comyn’s take-home pay swelled nearly 50 per cent to $10.4 million in the 2023 financial year as his long-term bonuses finally vested.”

That means his usual salary is around $5 million but as the share price shows, he has done a good job.

When Comyn took over as CEO in April 2018, the share price was $73. It’s now $144 — nearly a 100% gain in six years. While it looks like the CBA did pay a lot, but it got plenty of bang for the bucks it gave to its CEO!

My argument isn’t so much that Bullock was overpaid compared to others. I do think PMs and Premiers should be paid more, while some boards are too generous with their CEOs, with their incentives, as in case with Joyce. The question is whether the RBA boss has done a good job, given the payment she receives?

Recent analysis from the IMF accused our RBA of not raising the cash rate over 5% and that has impeded the killing off of inflation.

The new governor has overseen eight meetings and only raised rates once. As a consequence, she has failed her inflation test but done really well making sure that the jobless rate hasn’t gone through the roof. It’s now 4.1%, while many economists thought it would be closer to 5% and that’s why they expected rates to be cut by mid-2024 but it now looks like February next year. That said, the IMF thinks it could be May!

The longer it takes for rates to be cut and core inflation to get into the 2-3% band, the more we’ll question whether our RBA boss should be on incentives that reward a good performance but ‘punish’ failures.

When it comes to the RBA, we tend not to be too critical of underperformance, as long as the boss doesn’t make crazy predictions of rates being on hold until 2024!