The chief executives of ASX 200 companies get, on average, more than double the pay of the second highest paid executive in their company.
Analysis in AMP Capital’s latest Corporate Governance Report shows the average CEO was paid a total of $3.8 million in 2014.
The second highest paid executive received $1.6 million. Excluding the pay of the CEO, the average key executive banked $1.4 million.
AMP looked for evidence that executive pay is reasonable and aligned with shareholder interests.
As a shareholder in many of Australia’s biggest companies, AMP gets to vote at AGMs on remuneration reports. It is increasingly finding itself voting in favour of proposed pay for senior executives rather than against. In 2015, 84% of reports were supported, up significantly from the 2008 low of 61%.
“CEOs deserve to be paid a premium for running a listed company in Australia as every facet of their role is crucial to investors,” says Karin Halliday, AMP capital corporate governance manager.
The Corporate Governance Report has also found that gender diversity on Australian listed company boards has improved.
In 2010, 60% of the companies AMP Capital held had no women directors. By 2015, this number had fallen to 21%.
“AMP Capital believes there is a sound business case for improving gender diversity,” Halliday says.
“In addition to demonstrated links between performance and the number of women on a board, we have found that when companies have more women directors, they present fewer characteristics of poor governance.”