For the first time since the Australian Council of Superannuation Investors (ACSI) has been collecting information on ASX200 CEO pay, none of the chief executives from any of the big four banks were among the top 10 highest paid ASX100 bosses in 2017-18.
ACSI’s latest CEO Pay in ASX200 Companies report, now in its 17th year, revealed that CEO pay generally increased in 2017–18, corresponding with “strong equity market performance”.
However, the survey report indicated that bank CEOs did not share in the increase.
“FY17 was a rarity in the history of our longitudinal survey, in that no ‘big four’ bank CEO featured in the top 10 reported or realised pay groups," said ACSI.
“For the life of our survey there has been at least one, and usually two or more, big four CEOs in the top 10 CEOs,” the survey report said.
This was further reflection of an incremental decrease in CEO pay in the banking sector, it said.
“This has occurred as incumbent CEOs have been replaced with lower-paid successors or, in the case of CBA, the unprecedented decision by the board to pay no bonuses to senior executives for FY17 in the wake of action against the bank by AUSTRAC.”
Mr Narev featured in the top 10 list in 2016 but did not reappear this year because his bonus was cut to zero following AUSTRAC’s allegations of money-laundering.
“Incidentally, Narev was the only CEO to feature in both the reported and realised top 10s in FY16 not to feature in both in FY17,” the report added.
In the report foreword, ACSI chief executive Louise Davidson said that more broadly, ASX200 reported and realised pay did increase due to strong equity markets — as well as increases in bonus payments.
“Both the average and median total bonuses to ASX100 CEOs were the highest recorded since ACSI began collecting this data in 2011. Not only that, but bonuses paid continue to be near the top end of their maximum potential.”
But Ms Davidson noted that the CEO pay increase was occurring at a time of low public trust in businesses and “anaemic” wages growth.
“Against this background, decisions to significantly increase bonuses appear not only tone-deaf but also make me wonder whether boards have lost sight of the link between community and investor expectations, and a company’s social licence to operate,” she said.
She added that community perceptions of business could incur more damage and warned: “We see a real prospect of regulatory intervention if the current trend continues.”
