After years of relative restraint, CEOs have enjoyed a surge in bonus payments that boosted their average reported pay to $5.5 million in 2017 – levels not seen since before the global financial crisis in 2007, the Australian Council of Superannuation Investors (ACSI) study has found.
The figure is the highest recorded by ACSI in the 17-year history of its survey.
Using a different method to calculate “realised pay” – a figure that includes the value of share-based payments realised during the year – the average CEO took home $6.2 million, the ACSI report found.
A surge in the value of shares as the ASX gained ground over the year helped pump up the value of share-based remuneration in CEO pay bundles but ACSI said share price rises were not the only driver.
ACSI chief executive Louise Davidson criticised soaring bonus payments that drove gains for big bosses last year – with average and median total bonuses paid to CEOs at the 100 top companies hitting their highest level since the data was first gathered in 2011.
“At a time when public trust in business is at a low ebb and wages growth is weak, board decisions to pay large bonuses just for hitting budget targets rather than exceptional performance are especially tone-deaf,” Ms Davidson said.
Base pay for CEOs has increased little, in line with moves in recent years to contain fixed payments, but ACSI has found all but six of the 80 CEOs eligible for a bonus in 2017 received one.
“The FY17 survey results illustrate that a top 100 CEO is more likely to lose their job than to receive no bonus for performance reasons,” ACSI said.
Domino’s Pizza CEO Don Meij topped ACSI’s list of the highest-paid CEOs for 2017, with a realised pay of $36.84 million after he exercised options to acquire shares worth $35.7 million.
The survey also found there were too few female CEOs among the 200 biggest companies – nine in total – to analyse gender pay equaility.
ACSI said that among the 100 biggest companies, there were more CEOs called Andrew than there were women.
ACSI represents asset owners and investors that manage large parts of the funds in Australia’s superannuation system and speaks on environmental, social and governance issues.