New research from proxy advice group the Australian Council for Superannuation Investors revealed that the median bonus awarded to CEOs of ASX 100 companies fell to $1.14 million, down from over $1.5 million in the previous year and below the 10-year low of $1.25 million recorded in 2013.
At the same time, 31 per cent of ASX 100 CEOs did not receive a bonus, the highest number in two decades and a stark contrast to the year after the GFC in 2009, when all but 12 ASX 100 CEOs received a bonus.
ACSI head Louise Davidson said the results showed investor engagement with blue-chip company boards was having a direct impact on executive remuneration.
“The research shows that boards have responded positively to more than a decade of active investor engagement and are now better aligning short and long term pay with investor outcomes,” Ms Davidson said.
“ACSI has been engaging with companies on executive remuneration to improve outcomes for its members. Boards have worked to ensure remuneration is aligned to the value delivered to investors over the long-term.”
Overall CEO pay also dropped significantly over the period, with median realised pay falling 3.9 per cent year-on-year to $3.99 million, and median fixed pay falling 5.1 per cent to $1.68 million, the lowest level since 2007.
However pay among the top CEOs varied dramatically, with the country’s top-paid boss – CSL’s Paul Perreault – taking home $43 million in realised pay, a new record for a CEO salary.
Ms Davidson said while boards appeared to be doing a better job at aligning CEO remuneration, the end of the COVID period would provide another opportunity for reassessment of their methods.
“Newly appointed CEOs almost always now start on a salary base significantly lower than their predecessors and bonuses are becoming not just harder to achieve, but more often paid in equity rather than cash,” she said.
“As the impact of the pandemic subsides, boards will need to keep assessing whether performance hurdles and the value of shares being awarded are appropriate to ensure any new incentives align with gains made by investors.”
