Australian Financial Review‘s annual CEO salary survey, compiled by data firm OpenDirector, showed that the top 50 CEOs earned an average of $ 6.18 million in reported salary in the year to June.
The average CEO salary increased 24 percent after salary stoppages and a record hit on bonuses in 2019-20. CEOs’ base salaries rose 4 percent, and long-term incentives rose 23 percent to $ 2.61 million. The biggest increase was in bonuses. Annual bonus payouts rose 67 percent to $ 1.63 million, the highest increase in the most recent record after the previous year’s record lows.
CEOs’ total statutory reported salaries must be disclosed each year in accordance with accounting standards, while take-home salaries – which take the market value of shares and options granted in previous years – must not be disclosed in the same consistent manner. manner. In good times, they can be worth millions more than stated. In troubled times, they may be worth much less, such as Qantas CEO Alan Joyce’s $ 1.9 million home salary this year compared to $ 5.29 million in statutory reported salary.
The dramatic wage increases led to 14 “strikes” on wages at the top 200 companies as the annual shareholder meeting season ends. A strike is a protest vote by investors of 25 percent or more. Companies on the receiving end of strikes included Dexus, Link Group, Rio Tinto, Kogan, IAG, Transurban and Crown, with ten of the protest votes over 40 percent.
Several of the “strikes” concerned issues in addition to CEO salaries, such as the 60 percent protest vote in Rio Tinto in the wake of the Juukan Gorge scandal.
The 37 percent protest vote in Myer was driven by major shareholder Solomon Lew, who failed to trigger a board release. Crown Resort shareholders also delivered another strike to the beleagured casino giant, but refused to waste the board despite generous payments to outgoing directors.
Despite the good results and record runs in the stock market last fiscal year, investor groups said, a key concern this year was the use of retention bonuses and a question for boards about “how much is too much?”
“Retention bonuses have not been effective in holding on to key management,” warns Australian Waterholders’ Association CEO Rachel Waterhouse.
Australian Council of Superannuation Investors CEO Louise Davidson says CEO salary increases are no surprise after previous years were the lowest level ever.
“Investors asked, ‘Were incentives driven by improved performance or simply’ catch-up? ‘” She says.
Executive search specialist Jason Johnson notes that the “extraordinary year for CEO salaries” comes from a low base and is attributed to low interest rates, government stimulus, strong spending and a general increase in GDP, which drove a once-in-a-generation growth in company values.
“Macquarie’s stock price was $ 85 in March 2020 and is now over $ 200, so it’s no surprise to see Shemara as the highest paid CEO given the enormous value creation,” he says.
“Ruslan Kogan’s salary was highly correlated with stock market performance and he has been paid for a remarkable value creation during the pandemic. Next year  may be a different story as some of the pandemic demand comes out, “Johnson said.
OpenDirectors Donald Hellyer says the data reflects extreme volatility in CEO salaries over the past two years, while Odgers Berndtson’s executive recruiter Tom Mutch says investors will have to wonder if they are paying for outperformance, or if “it rising tides had simply lifted all boats? “
Management remuneration expert Dave Edwards believes it is more a case of a “return to normal” following the boards’ response to the pandemic and austerity measures launched in 2020.
He says CEOs (apart from those who are internally promoted to CEO, which increases average salary increases) enjoyed a median salary increase of 16 percent, less than average, and this was mostly in the form of annual bonuses, which reflects rising stock prices.
This year’s other big pay rises went to Seven West Media’s James Warburton with a pay rise of $ 3.23 million, Ramsay Health Care CEO Craig McNally with a pay rise of $ 3.97 million and Cochlear’s Dig Howitt, who saw his pay rise by $ 2. $ 16 million.
Kogan’s $ 8.4 million salary increase, in addition to his 21 million shares worth about $ 200 million, was the highest. The second strike at Thursday’s general meeting came after a 44 percent protest vote last year, but investors declined to vote for a waste of the board.
The board, led by Mr. Knight and joined this year by Janine Allis and James Spenceley, says the pay rise is due to withholding options granted to co-founders Kogan and David Shafer worth more than $ 100 million when shareholders approved the grant at the annual meeting in November last year.
“The Board of Directors decided to grant Mr. Kogan and Mr. Shafer the retention options because the Board of Directors believed that it was in the best interests of the company and the shareholders to encourage Mr. Kogan and Mr. Shafer to remain in their positions for the next three years given their documented track record, “they said.
Kogan was valued at $ 667 million by the Rich List research team last year, when shares in Kogan reached nearly $ 25 in October 2020, when the online retailer ran the pandemic highs, but they have since fallen below $ 9.
Sir. Kogan spent about $ 20 million buying his parents a house a few blocks from his mansion in Melbourne’s exclusive Toorak in November to pay back the care of the Belarusian immigrants, who made every effort to move to Australia and raise their family in a housing commission apartment. .