Chief executives find bonuses a bit skimpy

CASH bonuses for the heads of Australia's biggest companies have fallen to levels not seen before the financial crisis as profits and share prices have come under pressure.

CASH bonuses for the heads of Australia's biggest companies have fallen to levels not seen before the financial crisis as profits and share prices have come under pressure.

The latest annual remuneration report by the Australian Council of Superannuation Investors, showed average bonus payments of $1.25 million last year were down to their lowest level since 2004. The bonus payments were 20 per cent below the previous year.

The ACSI report, to be released today shows the fixed pay of chief executives in Australia's top 100 listed companies held steady in 2011.

Overall, the average cash pay for a top-100 CEO declined 8.9 per cent from 2010 levels to $3.05 million, reflecting the fall in bonus sizes.

ACSI chief executive Ann Byrne said a more mature conversation on executive pay was taking place between boards and investors.

"It is clear that directors began listening to shareholder views on bonus sizes during 2011 and began making the adjustments that have continued into the first part of 2012," she said yesterday.

Even so, about 90 per cent of chief executives still received some form of bonus payments over their fixed pay cheque, she noted.

The analysis of remuneration for nation's top 200 companies by ACSI, which advises the nation's biggest superannuation funds, throws new light on how much our corporate leaders are really paid.

It shows the pay gap between what is reported in company disclosures and what chief executives often end up taking home. BHP Billiton's Marius Kloppers was last year paid $11.08 million, but his realised pay was $17.3 million, the ACSI report shows.

Minimum disclosures often fail to take into account the upside chief executives often receive from additional packages such as deferred bonus shares or cashing in on options, which is a right to acquire shares in a company often at a heavily discounted price.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles