Corporate fat cats cash in

Bosses of Australia's largest companies enjoyed pay rises almost three times the rate of inflation and equivalent to more than twice the average wage in the past year.

A Saturday Age analysis of company reports filed in recent months by most of the country's 100 largest ASX-listed companies shows that the median increase in base pay for chief executives for their latest financial year was about 9 per cent - up from $1.47 million to $1.61 million.

Add in the chief executives' short-term cash bonuses and the cash-in-pocket rises to $2.61 million, up 5 per cent. In dollar terms, that means they picked up cash gains of about $130,000 a year.

The Australian Bureau of Statistics' most recent figure for the annual average wage is about $53,000. It estimates that wages have risen by 4.7 per cent for males and 4.1 per cent for females over the past year.

Australia's consumer price index at June 30 rose by 3.6 per cent, with the impact of higher fruit and petrol prices. The Reserve Bank this week estimated that inflation was now running closer to its preferred range of 2 to 3 per cent, excluding any impact of carbon tax proposals.

Among the ASX 100, the top five best-paid chief executives last financial year were Westfield's Frank Lowy ($15.96 million), Rio Tinto's Tom Albanese ($12.75 million), ANZ's Mike Smith ($10.86 million), BHP's Marius Kloppers ($10.84 million) and Westpac's Gail Kelly ($9.59 million).

Executive and board remuneration will soon come under further scrutiny from shareholders, whose investments have been hit by collapsing markets, as this year's annual meeting season begins.

''Shareholders will say: 'We know it's tough, we understand it's tough, but should we be the only ones who hurt? You still get bonuses ?whereas I only get my bonus when the sharemarket is performing well','' warned Ann Byrne, chief executive of the Australian Council of Superannuation Investors, the group that represents industry super funds.

Total remuneration of executives, which includes the estimated value of share packages that may take several years to earn, showed a median decrease of 1.3 per cent, from $3.57 million to $3.52 million in the latest financial year.

That decline most likely reflects falling share prices affecting the value of their packages, and tougher trading conditions that meant executives failed to clear all of the hurdles needed to achieve maximum pay.

The Age analysis differs from an annual chief executive pay report compiled by Ms Byrne's ACSI, and released last month. The ACSI's report, based on the payments to executives of the top 100 companies in 2010, said that median fixed pay of executives rose only slightly from $1.81 million to $1.82 million. The ACSI's fixed remuneration measure includes superannuation, long service leave and miscellaneous short-term perks as well as base pay.

The ACSI also singled out the five best-paid and five lowest-paid chief executives to analyse whether their pay reflected their companies' performances. Mr Lowy's $14.3 million in fixed pay and bonus and the $11.2 million earned by former Leighton Holdings chief Wal King were criticised by the ACSI for being insulated from the effects of performance.