CEOs of the ASX100 Firms Received an Average of 66.3% of Their Maximum Potential Bonuses

In 2023, chief executives faced a higher risk of losing their jobs than missing out on their bonuses, according to research from the Australia Council of Superannuation Investors (ACSI).

ACSI’s 23rd annual CEO Pay in ASX200 Companies report analyzed the compensation of 145 of Australia’s top executives. It revealed that CEOs of the top 100 publicly listed companies in Australia experienced a decrease in realized pay, with the median falling to $3.87 million, down from $3.93 million the previous year. Similarly, the median pay for CEOs of ASX101-200 companies dropped from $2.10 million in FY 2022 to $1.95 million, the lowest median recorded in the decade ACSI has tracked realized pay, which includes actual cash and equity received.

This decline in pay is attributed to increased investor scrutiny and greater focus from corporate boards. CEO bonuses, calculated based on base salary, company performance, and other specific factors, also reflected this trend. For instance, in the mining sector, bonuses are impacted by events like workplace fatalities.

CEOs of the ASX100 firms received an average of 66.3% of their maximum potential bonuses, down from 71% in FY 2022. Notably, Don Meij of Domino’s Pizza Enterprises and David Koczkar of Medibank did not receive bonuses. In contrast, Cameron McIntyre of Carsales was the only CEO in the top 100 to receive 100% of his eligible bonus. Bonuses for ASX101-200 CEOs were paid at 60.7%, a decrease from 68% the previous year, with only five receiving maximum bonuses compared to 12 in FY 2022. Six ASX101-200 CEOs missed out on bonus payments in 2023.

Ed John, executive manager of stewardship at ACSI, emphasized that bonuses should not be guaranteed and should reflect exceptional performance, especially as companies focus on productivity and performance.

The study found that ASX200 CEOs were three times more likely to lose their jobs than their bonuses. There were 24 termination payments in the ASX200, with 17 among the ASX100—the highest number since ACSI began tracking this data in FY 2008. FY 2023 saw the highest aggregate termination cost in the ASX100 since FY 2011, totaling $33.52 million. Despite this, the average size of termination payments decreased, with 12 of the 17 ASX100 termination payments exceeding $1 million and seven surpassing $2 million. Paul Perreault, former CEO of biotech company CSL, received the highest termination payment of $7.61 million in FY 2023.

ACSI noted that running Australian-listed companies based in the US continues to be lucrative. Resmed’s Mick Farrell earned the highest pay at $47.58 million in FY 2023, followed by News Corp’s Robert Thomson at $41.53 million. Domestically, Greg Goodman of Goodman Group and Shemara Wikramanayake of Macquarie were the top earners, with realized pay of $27.34 million and $25.32 million, respectively. Wikramanayake had the highest cash pay at $9.86 million.

ACSI’s research indicated that reported pay levels for ASX200 CEOs slightly increased, which John warned could lead to significantly higher realized pay in the future. He stressed the importance of boards remaining vigilant and setting appropriate performance hurdles to prevent a surge in CEO pay levels.

Have you read?
The Top 100 Highest-paid CEOs in America.
Countries With Lowest Rate of Economic Growth in 5 Years.
Countries Most in Debt to China.
Most Attractive Cities for Global Talent.
Largest economies in the world by Share of Global GDP.