Australia’s highest paid CEOs revealed in new 2017 report

AUSTRALIAN CEOs are still “extraordinarily privileged” with salaries in the millions and “bonuses appear far easier to get than they are to miss out on”.

Domino's CEO Don Meij is still a high earner. Picture: David Swan

AUSTRALIAN CEOs are still ‘extraordinarily privileged’ with salaries in the millions and “bonuses appear far easier to get than they are to miss out on”.

The Australian Council of Superannuation Investors (ACSI) CEO Pay in ASX 200 Companies August report has revealed the average realised pay for ASX100 Chief Executives $5.7 million, compared to $5.54 million in 2015. This includes bonuses and shares.

The ACSI annually examines reported and realised pay for CEOs in the ASX200.

Reported pay is the amount companies must declare in company financial reports, while realised pay includes cash and equity that comes from company shares can be part of a CEO’s remuneration.

The highest paid ASX 100 chief executives were Peter and Steven Lowy of Westfield Corporation on a combined $26.2 million.

Co-CEOs Peter Lowy and Steven Lowy from Westfield. Picture: Hollie Adams/The Australian

It is way above the annual salary Prime Minister Malcolm Turnbull gets, which increased from 517,504 to $527,854 this year, and Opposition Leader Bill Shorten’s salary increase from 368,224 to $375,588.

Australia’s average salary for a full-time worker pales in comparison, which is $81,947 per year, according to the Australian Bureau of Statistics, with bonuses and overtime included.

Four ASX100 CEOs earned more than $20m in 2016 on a realised-pay basis, with Macquarie Group’s Nicholas Moore ($25.7 million), Domino’s Pizza Enterprises’ Don Meij ($21 million) and James Hardie Industries’ Louis Gries ($21 million) joining Westfield Corporation’s CEOs, the Lowy brothers Peter and Steven, in this category.

The highest paid top 10 CEOs on their realised pay in 2016. Picture: Supplied/ACSI August report

“Meij’s ranking on the back of a soaring Domino’s share price was especially remarkable, given his $4m salary ranked him at only 44, based on reported pay,” the report stated.

Challenger Limited chief executive Brian Benari also had a realised pay of $10 million which was double his reported figure.

Of the top earning CEOs from the ASX100 and ASX200 companies, only one was a woman.

Laura McBain of Bellamy’s was listed as earning $1.3 million on her reported pay but received $5.8 million in realised pay.

The ACSI report found that the two CEOs heading companies in the ASX100 to 200 range had a realised pay above $10 million were Premier Investments’ Mark McInnes ($11.09 million) and BT Investment Management’s Emilio Gonzalez ($10.45 million).

Domino's CEO Don Meij with his company’s pizzas. Picture: Annette Dew

On bonuses, the ACSI report stated that almost a third of ASX100 CEOs, or 25 of 83, received bonuses equal to 80 per cent or more of their potential maximum allocation in 2016. Eight received no bonus, compared to four in 2015.

The median bonus given to ASX 100 bosses was $1.5 million, increasing from $1.95 million to $2.06 million “due to a handful of very large bonuses”.

The largest cash bonuses were paid to the Lowys, at $10.2 million, followed by Macquarie’s CEO Nicolas Moore whose cash bonus was $5.3 million.

“Six bonus payments exceeded $3 million. Aside from the Lowys and Macquarie’s Mr Moore, this occurred at CSL, Fortescue, James Hardie and Qantas,” the report stated.

While remuneration levels have not risen significantly in the ASX100, the ASCI states that the persistence of bonus payments remains a concern for investors.

CEO Nicholas Moore at the Macquarie Group AGM. Picture: Stuart McEvoy/The Australian.

“A ‘bonus’ is commonly understood as something paid for exceptional performance. Yet some 86 per cent of ASX100 CEOs received one, begging the question — are these amounts truly at risk?,” the report stated.

ACSI CEO, Louise Davidson, said: “Investors reasonably assume that bonuses will only be awarded for exceptional performance, over and above normal expectations.

“The prevalence of CEO bonuses at consistently high levels raises serious questions about the way performance hurdles are being designed and applied. The fact that only 18 CEOs received bonuses below 50 per cent of maximum indicates that they bear little relation to performance in many companies.

“We welcome recent examples of the use of board discretion to reduce bonuses. However, we can’t help wondering why these executives would have qualified for any payments in first place.”

The ACSI said in its report that it will continue challenging boards to ensure the rewards earned by CEOs are aligned with the experiences of their investors.

Ms Davidson added: “It’s refreshing to note that since the introduction of the ‘two strikes’ rule, and an increase in shareholder scrutiny, CEO pay has largely been held in check by Australian boards.”