Salary sacrifice: Pandemic puts executive pay under pressure

Pay levels at some of the nation’s biggest companies are falling as corporate earnings succumb to the pandemic.

Transurban CEO Scott Charlton has worn one of the biggest pay cuts. Picture: Jane Dempster.

Chief executives have felt the financial pain of the coronavirus crisis, with pay levels at some of the nation’s biggest companies falling as corporate earnings come under pressure — but others have had a pay boost as long-term share schemes were paid out.

Telstra chief executive Andrew Penn saw his pay cut slightly as the telco last week reported a 14.4 per cent drop in profit to $1.84bn.

Mr Penn’s total remuneration for last financial year was $5.04m — down from $5.12m a year earlier. While Mr Penn’s short-term bonus halved to $866,000, the vesting of long-term benefits cushioned the blow.

Some executives saw their pay increase.

Magellan chairman and co-founder Hamish Douglass saw a bump in his total remuneration to $6.04m from $4.34m a year earlier after deferred cash bonus payments vested. The total pay packet for Douglass could have been as much as $11m but he waived a $5m cash bonus “due to the impact of COVID-19”, according to company filings. Magellan last week reported a 20 per cent jump in net profit, while shareholders enjoyed a 16 per cent boost in full-year dividends.

Hamish Douglass waived a $5m bonus. Picture: Britta Campion

AGL’s chief Brett Redman also saw an increase in his pay, lifting to $3.89m last financial year from $3.19m a year earlier, the energy company annual report said. However, the last financial year represented the first full year that Mr Redman was in the role of CEO following his appointment in August 2018.

The lift came as AGL reported a near 20 per cent decrease in full-year profit to $816m and saw their share price touch a five-year low last week.

Mr Redman’s base salary decreased from $1.74m to $1.63m, with his final pay packet bolstered by a $660,000 short-term bonus and the vesting of long-term equity incentives.

Insurance Australia Group’s head Peter Harmer saw his take-home pay increase to $5.7m from $5.4m even though the company’s net profit reduced from 60 per cent to $435m. Mr Harmer, who has flagged his retirement for later this year, did not receive a boost to his base pay and missed out on a short-term bonus, but benefited from the vesting of nearly $3.2m of long-term incentives realised in September of 2019.

CBA chief executive Matt Comyn also saw his statutory pay lift by more than $1m to $5.68m, with share-based payments providing most of the boost. Mr Comyn was given a cash bonus of $1.21m, which was up from $747,000 a year earlier. However, Mr Comyn missed out on $1.31m worth of equity awards.

Freight railway company Aurizon’s CEO Andrew Harding’s total pay increased to $4.33m from $4.15m. However, his short-term bonus was down nearly $600,000 to just under $1m.

One of the largest pay cuts recorded at a major company so far was road operator Transurban’s CEO Scott Charlton.

Mr Charlton, whose company posted a $111m net loss, saw his total pay cut by 36 per cent, from more than $7m in 2019 to $4.54m.