ASX100 CEO salaries fell 8 per cent last year

ASX100 CEO salaries fell 8 per cent last year

In a seemingly distant era called FY19 when COVID-19 did not yet exist, rising share prices pushed the CEOs of mid-cap companies into the ranks of Australia's top executive earners.

A recent report from the Australian Council of Superannuation Investors (ACSI) based on a survey from Ownership Matters found the median pay for ASX100 CEOs dropped by 8.2 per cent while fixed pay remained flat.

However seven of the top 20 earners were not leading ASX100 companies, including IDP Education (ASX: IDP) CEO Andrew Barkla who topped the list with a pay packet of $37.76 million.

This meant Barkla beat the previous record of $36.84 million received by Domino's Enterprises (ASX: DMP) CEO Don Meij in FY17.

But Barkla only made the list because he exercised around three million options granted before IDP's initial public offering (IPO) in 2015, after shares rose from $2.65 to $10 each.

Meanwhile, Clinuvel Pharmaceuticals (ASX: CUV) CEO Philippe Wolgen secured third place for similar reasons, with $19.28 million of his $20.62 million remuneration coming from vesting shares. 

Other high flyers included CSL (ASX: CSL) CEO Paul Perreault in second place, Treasury Wine Estates' (ASX: TWE) Michael Clarke who has since left the company, and Webjet (ASX: WEB) CEO John Guscic who has since taken a pay cut due to COVID-19's impact on the travel sector.

The report also found three CEOs collected more than $15 million in cash over three financial years: Perreault, Clarke and Sonic Healthcare's (ASX: SHL) Colin Goldschmidt.

Interestingly, Treasury Wine Estate's new CEO Tim Ford's base salary is around $1 million lower than Clarke's at $1.5 million.

It should also be noted that Macquarie Group (ASX: MQG) CEO Shemara Wikramanayake was not included as she was only in the role for four months in FY19.

Companies domiciled outside Australia such as Janus Henderson, Fletcher Building, ResMed and News Corporation were excluded as they are subject to different remuneration disclosure requirements.

ACSI chief executive officer Louise Davidson said it was pleasing to see a "trend to restraint" on how CEOs and their teams are rewarded.

"More boards are using sensible discretion to rein in outcomes for senior executives - demonstrated by the fact that 25 CEOs had their bonuses zeroed out where performance was not adequate, compared with only seven a year earlier," Davidson said.

"That growing maturity and sophistication will be put to the test this year, with an extra layer of complexity added as directors and boards weigh the deep and persistent impacts of COVID-19 across their businesses, the Australian community, and globally.

She noted boards would need to be mindful of how remuneration levels will be received by the public this year, given a backdrop of financial pain, isolation and family dislocations caused by the pandemic.

"Remuneration trends in 2019 indicate many boards are well positioned to respond to these pressures," she said.

"For others, however, there is more work to be done to make sure they are 'reading the room' on executive remuneration.

"As always, the measure of a good incentive system is the ability to go beyond the 'check-the-box' approach to ensure pay outcomes reflect performance and the experience of investors in the company."

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