Australian CEOs, board directors and senior managers have taken salary hits in the last 12 months due to the economic impact of the COVID pandemic.
Released on Wednesday, the Aon and Governance Institute of Australia Board and Executive Remuneration 2021 report found that the number of CEOs receiving increases in fixed remuneration over the last year was down 53 per cent from the previous year.
Meanwhile, only 21 per cent of companies provided salary increases to non-executive directors, also down from 28 per cent last year.
“Australia is currently in a period of low wages growth, and it’s clear senior executives and board directors are not immune from this,” Governance Institute of Australia CEO Megan Motto said.
“Across the board, we are not seeing many – if any – meaningful salary increases.”
Ms Motto continued, “Against the backdrop of the last 12 months, companies must think carefully about the reputational impact of increases for executives and directors.
“When so many in the community face economic uncertainty, people want to see the ‘pain’ spread evenly.”
Aon Principal, Rewards Solutions, Dawson Wang added that the data suggests the remuneration environment for executive and non-executive directors can be described as “stagnant”.
“It seems that uncertainty driven by COVID-19 at the beginning of the 2020-2021 financial year led many companies to hold salaries at current levels or defer the timing of the increase,” Mr Wang said.
“It will be interesting to see the flow-on effect and impact on executive movement as the economy continues to rise above pre-pandemic levels and confidence returns.”
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