CEO pay in ASX200 companies

The pandemic-induced dive in CEO bonuses has been short-lived, with payments rebounding to record levels, Australian Council of Superannuation Investors (ACSI) research shows.

ACSI’s 21st annual CEO Pay in ASX200 companies research shows that while Australian boards responded to the market turmoil and community impact of COVID with appropriately reduced CEO pay outcomes in 2020, the pendulum swung markedly the other way in FY21.

Where the median bonus received in 2020 was just 30% of potential maximum, it shot up to a record-breaking 76.7% in 2021 – the highest in the seven years the research has collected this data.

The average bonus awarded to ASX100 chiefs has also hit a record $2.31mn, exceeding 2017’s record of $2.30mn.

“After their lowest year on record, big bonuses have returned, but they haven’t just rebounded, they’ve hit new heights,” Ed John, Executive Manager, Stewardship at ACSI said.

“That’s why investors, and ACSI, will be scrutinising closely the results-reporting season to see if this concerning trend of bonus ‘catch-up’ continues. This year’s outcomes will be judged against a backdrop of difficult financial markets and an uncertain economic outlook.

“Bonuses for CEOs shouldn’t be awarded for business-as-usual outcomes. Payments to senior executives have to be aligned with value created for shareholders and reflect true outperformance.”

Key findings:
• The median ASX100 CEO bonus, as a proportion of maximum, rose from FY20’s record low 31% to 76.7% – its highest in the seven years that this study has been collecting this data.

• Afterpay’s co-CEOs Anthony Eisen and Nick Molnar set a joint record for realised pay of $264.2mn
(more than $100mn each) after exercising their $1 options when the share price was near $90. Even
without their windfall, a new record high would have been set by CSL’s Paul Perrault (who also set the last record in FY20) with realised income of $58.9mn.

• The average bonus awarded to an ASX100 CEO hit a record $2.31mn, exceeding 2017’s record of

• Three CEOs received maximum bonuses over the past three years – Premier Investments’ Mark
McInnes, Charter Hall’s David Harrison and Steadfast’s Robert Kelly.

• By contrast, Qantas’ Alan Joyce was the only incumbent ASX100 CEO not to receive a bonus in either FY20 or FY21.

• Median cash pay for ASX100 CEOs rebounded 41.6% from $1.98mn to $2.80mn, after the impact of the pandemic in FY20 (which was the lowest recorded since 2003).

• Woodside’s Peter Coleman received FY21’s highest termination payment at $4.99mn. (FY20: $6.59mn to APA’s Mick McCormack). That included a $1.72mn cash bonus for less than four months work as CEO.

• More controversially, $4.85mn was paid to Crown Resorts’ Ken Barton who departed after being found not fit to hold a position of authority at a licensed casino. That included a $1.5mn consultancy
agreement, uncovered in the Victorian Royal Commission into Crown.

This study includes CEO pay for entities in the ASX200 for the 2021 financial year. The FY21 study is the 21st ASX100 CEO Pay longitudinal study by ACSI and the 11th year the study has included CEOs of ASX101-200 entities. It is the eighth year the study has included realised pay for all CEOs in the sample. The ACSI study is the only public source of realised pay data for all ASX200 CEOs and in FY21, as in FY20, also includes realised pay data for the 13 ‘foreign company CEOs’ in the ASX200 sample.

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