Wesfarmers slashes CEO Richard Goyder’s pay by 50pc

Wesfarmers’ CEO has seen his pay packet dive, while senior executives lost $10 million in awards for 2016.

Coles boss Mr Durkan remained the highest paid senior Wesfarmers executive. Stuart McEvoy/The Australian.

Wesfarmers chief executive Richard Goyder has suffered a 50 per cent dive in his pay packet for fiscal 2016, while senior executives at the Perth-based conglomerate have lost out a total of $10 million in benefits, bonuses and incentives.

It comes as the group’s disastrous $2.2 billion in writedowns and asset impairments for 2016 demolished their bonus schemes.

However, the boss of Coles, John Durkan, who steers Wesfarmers’ biggest and most important business, did enjoy a higher remuneration payout for 2016 as his supermarket chain continued to outpace and outcompete major rival Woolworths.

Mr Durkan’s pay hit $5.288 million, up from $4.564 million in 2015.

And the managing director of Bunnings, John Gillam, who during the year pumped up his hardware profits to finally kill off Woolworths’ Masters chain, only saw a small reduction in his total take home pay but was awarded the biggest slice of his available bonus.

The greatly reduced salaries for most of Wesfarmers’ biggest earners comes after the company saw its full-year profit slump more than 80 per cent, its coal arm produce a $310 million loss and its loss-making department store Target embroiled in an embarrassing and costly accounting scandal that forced the departure of its CEO and an investigation.

The Wesfarmers annual report, released this afternoon, has shown that long-serving CEO Mr Goyder took the bulk of the pain from the writedowns of its embattled discount department store Target and its Curragh coal mine, as his full-year remuneration slipped to $5.489 million, from $9.863 million in 2015.

Mr Goyder’s base salary was $3.348 million, in line with 2015.

The extensive Wesfarmers remuneration report shows that Mr Goyder forfeited a bigger chunk of his short-term bonus than any other senior manager at the conglomerate, as he gave up 75 per cent of his short-term incentive awards.

The non-cash impairments recorded in Target and the Curragh coal business impacted the annual incentive outcomes for Mr Goyder, as well as Wesfarmers’ chief financial officer Terry Bowen who saw 53.3 per cent of his bonus evaporate.

Mr Bowen, who is seen as a possible candidate to one day replace Mr Goyder, had a total remuneration of $3.54 million in 2016, down sharply from the $5.31 million he took home in 2015.

It was a tough year for Wesfarmers, as its profit in the year to June 30 plunged 83.3 per cent to $407 million compared to a year ago, due to $2.2 billion in pre-tax writedowns linked to continued losses at Target that hit $195 million and the collapse in the coal price which triggered a $310 million loss at its resources division.

In total, Wesfarmers senior executives, including Mr Goyder, Mr Bowen, Coles boss John Durkan and Bunnings boss John Gillam trousered $25.179 million in 2016, down from the $35.46 million paid out in 2015.

But not all Wesfarmers divisional bosses saw their remuneration fall in line with that of their leader, Mr Goyder.

Guy Russo, the successful CEO of Wesfarmers retail business Kmart, and who has recently taken control of Target, was paid $4.037 million, up from $3.828 million, while he only forfeited 19.9 per cent of his short-term bonuses.

Mr Russo’s base salary was increased to $1.7 million from $1.32 million, as he takes on the larger role of overseeing Kmart and Target.

Bunnings boss Mr Gillam did better, only giving up 7.4 per cent of his bonus (the best for any senior executive) although his total pay at $4.4 million was slightly down on the $4.8 million he received in 2015.

Coles boss Mr Durkan remained the highest paid senior Wesfarmers executive, apart from Mr Goyder, aearning $5.28 million in 2016, up from $4.564 million in 2015. He only forfeited 25.2 per cent of his short-term bonus.

The former boss of Target, Stuart Machin, who stood down in the wake of the accounting scandal lost 100 per cent of his bonus while his base salary of $763,414 ended up as only total pay of $122,403 for the year, as most of his long-term incentives disappeared. In 2015 he was paid a total of $1.9 million.