Future uncertain after Donald Trump US election victory

It’s one thing for Donald Trump to be president, but quite another to think what sort of people put him there.

CBA’s David Turner. Illustration: Sturt Krygsman.

It’s one thing for Donald Trump to be president, but quite another to think what sort of people put him there and what sort of mood they are in, leaving much of America and Western democracy in a state of near despair.

No one can ignore the movement that took hold with Britain’s Brexit vote in June and was extraordinarily rammed home with the Trump victory, which in many respects leaves US society in a state of crisis. Mainstream political parties and elite groups like big ­business have some fundamental questions to ask about their next moves because this was no ­aberration.

Fringe political groups around the world and in this country, like One Nation, will be emboldened by the democratic support so evident from the US vote.

Global financial markets will be in a state of near-term panic not only with the reality of the Trump presidency and what it means, but total uncertainty as to where he goes next.

He owes no one anything and steps into the White House with Republican control of the Senate and the House, which on paper gives him an armchair ride to do what he wishes.

That assumes the Republicans support him, when so many ­attacked his campaign, and indeed both major political parties have some real questions to ask about how they failed so completely to deliver a rational outcome.

The fact the Republicans are his checkpoint should at least ensure the policies that do emerge are business- and market-friendly.

Then again, Trump cham­pioned protectionism in the campaign and very much a US-centric view of the world, which doesn’t give much comfort to distant allies like Australia.

He can’t do much about agreements already in place but he can certainly put a stop to the lingering doubts over the Trans-Pacific Partnership agreement.

Trump’s campaign has attacked the legitimacy of most US institutions, not to mention racial minorities and women, but also questioned the independence of the Fed, and at a time when the US has never had such wide income disparities, his stated economic solution is tax cuts for the rich.

Since the GFC the top 1 per cent of the population has increased its share of US pre-tax income from 10 to 18 per cent and post-tax from 8 to 12 per cent.

Americans want change.

The country is bitterly divided and after the gobsmacking campaign you have to wonder whether Trump is the sort of leader to unite the country.

The sun will still shine this morning and just maybe his opening statements will offer a sense of encouragement, which will need to be followed by action, including having the right leadership team around him.

But right now the reality is America has chosen a president from the outside who has demonstrated complete unpreparedness and unsuitability for the role.

Too little, too late

Outgoing Commonwealth Bank chair David Turner’s attempt at a cosmetic concession to shareholders by withdrawing a motion setting the rules for share grants to chief Ian Narev said it all. The CBA board simply doesn’t understand the degree of community and shareholder anger at its pay policies and performance.

The more-than-51-per-cent of votes against its remuneration report said it all.

New chair Catherine Livingstone has the job of trying to regain shareholder trust while at the same time treading the fine line between delivering value to customers, the community and shareholders.

That is no easy job.

The bank withdrew one motion which covered long-term incentives to CBA boss Ian Narev, but this meant he is in line to receive the same 55,443 shares — it’s just they will be governed by the hurdles approved by shareholders last year.

Westpac timed the release of its annual report well — on the same day as the CBA shellacking — but as events transpired it satisfied most of the concerns at CBA and ANZ over excessive short-term bonuses.

Just three of the 12 executives listed received their full short-term bonus. This included consumer bank boss George Frazis, business bank boss David Lindberg and CFO Peter King.

This meant chief Brian Hartzer in bank parlance effectively received a pay cut, as he only picked up 87 per cent of a potential 150 per cent short-term bonus.

Between 2012 and 2015, out of 45 bonus payments made, just four were below target.

This time nine of the 12 were below target.

Hartzer will still be able to pay the rent, with cash pay of $2.8m plus a $1.3m cash bonus, with another $1.03m in long-term incentives to provide a total pay of $5.1m. The Westpac boss cashed in the 332,000 shares he was awarded in 2012 as sign-on bonus to help pay for his Vaucluse digs.

At first glance Westpac will receive a tick from the proxy firms for not paying full short-term bonuses in a year of flat returns, while ANZ will receive a big cross for paying near-maximum bonuses on poor returns.

The CBA change was sold as a sign the bank was listening to shareholder concerns, but it was too little too late.

In 2015 Narev pulled in $12.3m, including $6.8m in long-term shares, which meant he was effectively paid the same as 246 bank tellers.

Last financial year he was paid just $6.8m, or the equivalent of 136 tellers.

SPC canned

The new Woolworths house brand tinned tomato contract is with the Thai-owned Safcol company based in Elizabeth in South Australia.

The move follows the dumping of the Coca-Cola Amatil-controlled SPC tomatoes, which were deemed overpriced and of a lower than expected quality.

When you buy house brand tomatoes from Woolworths now, the fruit will be grown in the same place, the Murray Valley, pro­cessed in Echuca by the Japanese-owned Kagome and then shipped by truck to Elizabeth, where it will be canned just down the road from the old Holden factory. That’s a tortuous path to get some house brand canned tomatoes.

Over the road at Coles the house brand product comes from Italy and the aforementioned SPC, among other suppliers, and in all, branded and house brand, the market is sizeable at $200 million.

As an aside, while fresh tuna is locally caught; all canned tuna sold in Australia is imported.

In the case of the Tan family controlled Safcol, the tuna comes from a Thai factory. Safcol through Snappy Tom, is big in cat food sourced from Thailand, and locally makes soups and other tinned products for the house brand market.