CEO salaries jump 15 per cent in one year

But most general staff working for ASX-listed companies copped a real wage cut.

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The salaries of chief executives rose by an average of 15 per cent in the past year, while the base pay of managing directors across ASX-listed companies increased an average of 14 per cent, new remuneration data reveals.

While business has been warning of the economic danger of workers pursuing inflation-linked pay rises, the Governance Institute of Australia’s report finds senior executives at some of Australia’s largest listed companies received pay rises of more than double the rate of inflation during the current financial year.

In contrast, the overwhelming majority of general staff working for ASX-listed and unlisted companies received a pay rise between one and five per cent, a real wage cut given the higher inflation rate.

More than one in five unlisted and private companies and 16 per cent of ASX-listed companies also used the inflation rate for determining board remuneration, despite employers telling unions not to use inflation as the criteria for pay claims.

ACTU secretary Sally McManus said the data was “more proof that it is only working people that are bearing the brunt of this cost-of-living crisis and the impacts of inflation”.

“We hope the big business lobby condemns these pay rises in the same way they called out minimum wage workers last week,” she said. “No wonder Australian workers have had a gutful of double standards.”

According to the latest annual board and executive remuneration report, the average fixed remuneration of an ASX 200 managing director is $1.58m.

The report by McGuirk Management Consultants in collaboration with the Governance Institute surveyed 1167 boards across the public, private and not-for-profit sectors, including 226 listed companies.

Of listed company managing directors, 52 per cent were eligible for a performance bonus, with the average maximum bonus being 89 per cent. Of listed chief executives, 51 per cent were eligible to receive a performance bonus with the average maximum bonus being 72 per cent

Governance Institute chief executive Megan Motto said the above-inflation increase for executives was “an indication that a tight labour market and the rising cost of living is playing out at the executive level”.

“These are significant increases off the back of several years of relatively small rises in fixed pay for executives,” Ms Motto said. “With AGM season looming, boards will need to have a strong narrative around their remuneration policies to stand up to shareholder scrutiny and manage reputation risks.”

She said given roles like company secretary were “now on the skills shortage list, it’s not surprising we’re seeing some really big jumps in base salaries for these positions”.