The Australian Council of Superannuation Investors (ACSI) has revealed that ASX 100 CEOs received a median bonus of 66.3 per cent of their maximum potential in FY2022–23, with only two not taking home a bonus.
However, this marked a decrease from the previous fiscal year, where the median outcome was 71 per cent of their maximum. Similarly, the median value for ASX 101–200 companies declined from 68 per cent in FY21–22 to 60.7 per cent in FY22–23, while only six CEOs didn’t receive a bonus in the latter period.
On the other side of the coin, there were 24 termination payments across the full ASX 200 sample, underscoring that a company lead has more chance of being terminated than missing out on a bonus.
Commenting on the findings, ACSI’s executive manager for stewardship, Ed John, said bonuses should not become a “given” in Australia’s largest companies.
“At a time when companies are focused on productivity and performance, it is critical that bonuses are only paid for exceptional outcomes,” John said.
Moreover, realised pay – the value of cash and equity actually received – declined among ASX 100 CEOs in FY22–23, the median dropping from $3.93 million to $3.87 million. According to ACSI, this is the lowest figure in its decade-old dataset.
The ASX 101–200 median also fell from $2.10 million to $1.95 million.
Greg Goodman of Goodman Group remain the highest-paid domestic CEO, with a realised pay of $27.34 million. Macquarie’s Shemara Wikramanayake came in second with $25.32 million.
For listed Australian companies based in the US, however, ResMed’s Mick Farrell again eclipsed the local talent with $47.58 million, followed by News Corp’s Robert Thomson with $41.53 million.
The highest termination payment in FY22–23 was $7.61 million for former CSL CEO Paul Perreault.
“The fact that CEO pay has remained static indicates that greater investor scrutiny and focus from boards is having an effect,” ACSI noted.
The research also highlighted some “clear warning signs” for Australian boards and investors in the years ahead, according to the council.
Namely, reported pay levels for ASX 200 CEOs edged up in the year – with the median reported pay for ASX 100 leaders topping $5 million for the first time – which ACSI confirmed as a historic sign of much higher realised pay outcomes in the future.
As such, John emphasised that investors and boards must “not become complacent”.
“The numbers show that we could see a breakout in CEO pay levels in future. It will be critical that boards pay close attention and ensure performance hurdles are set at the right levels,” he said.
