The Australian Council of Superannuation Investors (ACSI) this week release its annual survey of CEO Pay in ASX 200 companies. The survey was conducted by Ownership Matters and includes pay data from 81 ASX 100 CEOs and 77 ASX 101-200 CEOs.
Former Macquarie Group chief Nicholas Moore, who retired late last year after more than a decade as CEO, missed out on top spot by just over $20,000.
Mr Moore took home $23,855,580 for the 2018 financial year. Qantas boss Alan Joyce was the highest paid CEO with $23,876,351.
At seventh place was Challenger Group CEO Brian Benari, who earned $11.7 million and was the only other financial services executive to make it to the top 10.
Macquarie shares have risen 3 per cent in the past 12 months while Challenger’s share price has fallen 30 per cent.
ACSI CEO Louise Davidson said investors have been concerned for years about the emerging “culture of entitlement” surrounding annual bonuses and short-term incentives in many of Australia’s largest companies.
“This year’s CEO pay survey confirms these concerns and lends weight to recent observations by the Australian Prudential Regulation Authority (APRA) ‘that there has been an absence of significant downward adjustment to remuneration at executive level.’”
The report found that more than half of ASX 100 CEOs received at least 70 per cent of their maximum bonus entitlements in FY18, suggesting that what is supposed to be “at-risk” pay may not be very risky at all.
“This is especially troubling at a time when public trust in institutions has been demonstrably undermined by revelations in the financial services royal commission, and in the wake of a soaring number of ‘first strike’ votes against remuneration reports – including a record 88 per cent vote against NAB,” Ms Davidson said.
“Intuitively, we would have expected that bonus outcomes would have been lower amid such intense scrutiny from regulators, politicians, the public and investors.”
In its latest Stewardship Report for 2018-19, global asset manager State Street Global Advisors (SSGA) singled out the poor pay plans of Australian companies that focus on short-term priorities and a “ratcheting up of pay to senior executives”.
“We find that Australian remuneration plans are shifting toward short-term priorities and away from long-term targets,” the report said.
“Concerning practices encouraging short-term priorities include the continued use of retesting features, as well as the combining of short-term incentive and long-term incentive plans into a single pay plan.”