The chief executives of the 300 largest Australian sharemarket-listed companies raked in an average of 28% more in salary and bonuses in 2006-07 compared to the previous year, according to the Australian Financial Review’s latest study of executive pay packets.
The average earnings of Top 300 chief executives were up significantly, from $1.99 million to $2.56 million in 2006-07. This equates to $49,231 a week – close to average yearly earnings for the wider workforce at $56,732.
The 10 highest paid CEOs for 2007, with total earnings, are:
Remuneration experts, executives and senior chairpersons say the pay surge is driven by strong corporate profits, particularly in the resources sector. The trend towards recruiting overseas senior executives to head Australian companies – of which Telstra head Sol Trujillo is the poster boy – is also pushing pay rates up, with the argument that you have to pay top dollar to attract top talent.
Linking shareholder return to pay is a topic for debate, with performance bonuses making up more than half of executive salaries at top 150 companies. In early October, Treasurer Peter Costello called for chief executives of companies that have not met expectations to reconsider accepting bonuses, mimicking the decision of outgoing Coles Group CEO John Fletcher.
Of the 10 highest-paid CEOs, King gave shareholders the greatest bang for their buck, with a total return of 166.9%; while News Corp shareholders reaped a return of just 10.4%. Leighton Holdings, Toll Holdings and Telstra have each faced non-binding shareholder protest votes against remuneration reports.
Entrepreneurs on the list of 300, who created their companies from scratch, include Westfield’s Frank Lowy (rank 5) and industrial property group Macquarie Goodman’s Greg Goodman (rank 30).
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