The annual rankings of the best paid CEOs of ASX-listed companies is out. Here it is:
Pay packets have been getting comparatively lighter on some measures, lagging behind inflation since the GFC. But the average total statutory pay for ASX top 100 CEOs has risen 2.9% to $4.84 million.
This is about about 63 times average earnings and means that CEO pay is now at its lowest level in a decade, and one-third below the 2007 peak of 94 times average earnings.
The numbers are distorted by two CEOs who formally left their roles at the end of the 2013 financial year — Brian McNamee of CSL and Dan Dienst of Sims Metal.
Under accounting standards, departure costs are included in their pay. For McNamee, this means he is listed as the highest paid CEO on a statutory pay basis with $19.11 million. For Dienst it ranks him sixth with $8.97 million.
Of the other eight top 10 CEO rankings, five were also in 2012’s list: the Lowy brothers at Westfield, ANZ’s Mike Smith, Westpac’s Gail Kelly and Richard Goyder of Wesfarmers.
Rio Tinto’s new CEO, Sam Walsh, also replaced his predecessor, Tom Albanese.
The average bonus was $1.21 million for those CEOs who got one. This is 8.2% down on the previous year and the lowest since 2003 when the bonus was $1.10 million.
The 13th Annual Australian Council of Superannuation Investors (ACSI) survey shows both the cash and bonus components of CEO pay are in decline based on 2013 financial year numbers.
ACSI chief executive Gordon Hagart says the findings demonstrate how continued investor scrutiny and increased board vigilance is resulting in positive impacts for shareholders.
“When investors behave like owners, and make it clear to those governing companies what their expectations are around executive pay, Australian boards have generally responded,” he says.
He says CEO bonus hurdles have become more demanding, signalling a curbing of the culture where bonuses were seen as an entitlement rather than a reward for outperformance.
Measurement periods for awards of equity have been extended across the market, better aligning executives with the long-term horizons of investors such as super funds.
“Perhaps the most telling of these is the decline in termination payments to CEOs,” Hagart says.
The median payout fell to $1.3 million in 2013 or little more than one-third of the $3.5 million median cost to companies and their shareholders in 2008.
The Corporations Act has been amended to enshrine the principle that any company wanting to pay its CEO a termination payment greater than a year’s salary must seek shareholder approval.
Of the other members of the 2012 list not ranked, only one retired, BHP’s Marius Kloppers.
The statutory pay of Cameron Clyne of NAB, Louis Gries of James Hardie, Suncorp’s Patrick Snowball and Origin’s Grant King saw them all rank outside the top 10 but they were still inside the Top 20.
Here’s the bottom 10 of the ASX 100 CEOs, those who were paid the least starting with the lowest paid: