Australian executives are still pocketing pay rises and bonuses during the pandemic, while workers face stagnant wage growth

(David Gray, Getty Images)
  • Almost two in three Australian bosses are still claiming their bonuses during the pandemic, new data shows.
  • Analysis from the Governance Institute of Australia shows that one in four ASX executives and directors are receiving raises, down from more than half the year prior.
  • As workers contend with genuinely stagnant wage growth, CEO Megan Motto cautioned companies to be “careful” about how they reward their biggest earners.
  • Visit Business Insider Australia’s homepage for more stories.

The pandemic may lead to frozen wages for workers, but Australia’s C-suite are still finding the budget to give themselves a raise.

The latest analysis shows that while more board directors and executives are forgoing bonuses and pay rises, bosses are still prioritising their own pay-packet over and above their staff.

Compiled by multinational Aon and the Governance Institute of Australia, the new report shows one in four CEOs are being paid more now than they were 12 months ago.

The figure is down from around one in two during the year prior, with the average raise coming in at 1.2% instead of 2%.

At the same time, around two-thirds of ASX 300 bosses received a bonus, down from around three-quarters previously.

Governance Institute of Australia CEO Megan Motto said the stats showed no one was immune as companies tightened their belts, but cautioned companies around the risk they run when they reward execs over staff.

“Against the backdrop of the last 12 months, companies must think carefully about the reputational impact of increases for executives and directors. When so many in the community face economic uncertainty, people want to see the ‘pain’ spread evenly,” Motto said.

While there’s no question some have heeded the warning, it demonstrates the divide between the boardroom and the work floor.

AON executive Dawson Wang described executive pay as having been rendered ‘stagnant’, but it is actually workers themselves that have long faced genuinely stagnant wages.

Given fixed remuneration is only part of the realised remuneration in the C-suite, forgone raises don’t necessarily mean overall packages didn’t grow. Other incentives tend to make up anywhere from 20% to 80% of packages, offering executives plenty of other avenues in which to make bank.

Separate analysis by the AFR shows long-term incentives have actually increased by almost 5% during the pandemic. Perhaps harder to swallow is the fact that bad performances have often been rewarded, as has been the experience of the CEOs of Star, Origin, Bluescope and Star32.

Qantas CEO Alan Joyce may have forgone six-months pay, but he still stands to pocket millions after cutting thousands of jobs on top of around 345,000 shares.

Contrast that with the experience of the average Australian. The most recent data shows wages have risen just 1.5% over the last 12 months off a far lower base, fresh off a decade of lost wage growth. At the same time property prices are rising 10 times quicker.

Missing wages growth is felt far more acutely by workers, who are also far more likely to be stood down or be in insecure jobs, as the million Australians who were let go during the pandemic attests. At the same time they are less able to work from home and have less of a financial buffer to withstand financial shocks.

Over the last decade, productivity gains haven’t translated to substantial wage growth but instead helped fatten company bottom lines, which in turn translates to higher executive pay and shareholder value.

Not that it’s just the private sector. Analysis showed last year that government bosses received $12.8 million worth of bonuses while public sector wages remained frozen.

As Reserve Bank Governor Philip Lowe urges employers to pay their workers more, it seems some in Australia’s executive class may have misinterpreted the message.