Revealed: Australia’s 50 highest-paid CEOs

The Australian Financial Review’s annual CEO pay survey, ready by information firm OpenDirector, confirmed that prime 50 CEOs earned on common $6.18 million in reported pay within the yr to June.

Average CEO pay jumped 24 per cent after pay freezes and a report hit on bonuses in 2019-20. CEOs’ base pay edged up 4 per cent and long-term incentives rose 23 per cent to $2.61 million. The largest hike was in bonuses. Annual bonus funds soared 67 per cent to $1.63 million, the very best enhance in current report after the earlier yr’s report lows.

CEOs’ complete statutory reported pay is required to be disclosed annually in keeping with accounting requirements, whereas take-home pay – which takes out there worth of shares and choices granted in earlier years – will not be required to be disclosed in the identical constant method. In good instances, they are often price tens of millions greater than is disclosed.

The dramatic pay rises led to 14 “strikes” on pay at prime 200 corporations because the annual shareholder assembly season winds down. A strike is a protest vote by buyers of 25 per cent or extra. Companies on the receiving finish of strikes included Dexus, Link Group, Rio Tinto, Kogan, IAG, Transurban and Crown, with ten of the protest votes over 40 per cent.

 

Several of the “strikes” associated to points past CEO pay, such because the 60 per cent protest vote at Rio Tinto within the wake of the Juukan Gorge scandal.

The 37 per cent protest vote at Myer was pushed by the largest shareholder Solomon Lew, who didn’t set off a board spill. Crown Resort shareholders additionally delivered a second strike to the beleaguered on line casino big however declined to spill the board regardless of beneficiant payouts to departing executives.

Despite the great outcomes and report run of the sharemarket final monetary yr, investor teams stated, a key concern this yr was using retention bonuses and a query for boards on “how much is too much?”

“Retention bonuses have not been effective for holding on to key management,” Australian Shareholders’ Association CEO Rachel Waterhouse warns.

Australian Council of Superannuation Investors CEO Louise Davidson says CEO pay rises aren’t any shock after the earlier years had been the bottom degree on report.

“Investors asked: ‘Were incentives driven by improved performance, or simply ‘catch-up?’” she says.

Executive search specialist Jason Johnson notes the “extraordinary year for CEO pay” comes off a low base and is attributed to low rates of interest, authorities stimulus, buoyant consumption and an general enhance in GDP which drove a once-in-a-generation development in firm values.

“Macquarie’s share price was at $85 in March 2020 and is now over $200, so it’s no surprise to see Shemara as the highest-paid CEO given the tremendous value creation,” he says.

“Ruslan Kogan’s pay was highly correlated to sharemarket performance and he has been paid for remarkable value creation during the pandemic. Next year [2022] may be a different story as some of the pandemic demand comes off,” Johnson says.

OpenDirector’s Donald Hellyer says the info displays excessive volatility in CEO pay over the previous two years, whereas Odgers Berndtson’s govt recruiter Tom Mutch says buyers should ponder whether they’re paying for outperformance or whether or not “the rising tide had simply lifted all boats?”

Executive remuneration professional Dave Edwards believes it’s extra a case of a “return to normal” after the response of boards to the pandemic and austerity measures put in place in 2020.

He says CEOs (excluding these internally promoted to CEO which bumps up the common pay will increase) loved a median pay enhance of 16 per cent, lower than the common, and this was principally within the type of annual bonuses, which replicate rising share costs.

This yr’s different large pay rises went to Seven West Media’s James Warburton, with a $3.23 million pay rise, Ramsay Health Care CEO Craig McNally, with a $3.97 million pay rise and Cochlear’s Dig Howitt, who noticed his pay enhance $2.16 million.

Kogan’s $8.4 million pay rise, along with his 21 million shares price about $200 million, was the very best. The second strike at Thursday’s AGM got here after a 44 per cent protest vote final yr however buyers declined to vote for a spill of the board.

The board, led by Mr Ridder and joined this yr by Janine Allis and James Spenceley, says the pay enhance is because of retention choices granted to co-founders Kogan and David Shafer price greater than $100 million when the shareholders accepted the grant on the annual assembly final November.

“The board decided to grant the retention options to Mr Kogan and Mr Shafer because the board believed it was in the best interests of the company and shareholders to incentivise Mr Kogan and Mr Shafer to remain in their positions for the next three years given their proven track record,” they stated.

Kogan was valued at $667 million by the Rich List analysis staff final yr as shares in Kogan reached nearly $25 in October 2020 as the net retailer rode the highs of the pandemic, however they’ve since fallen to beneath $9.

Mr Kogan spent about $20 million to purchase his dad and mom a house a couple of streets from his mansion in Melbourne’s upmarket Toorak in November to pay again the care of the Belarusian immigrants who staked every little thing to maneuver to Australia and lift their household in a housing fee flat.



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