Australia's top executives are starting to see their large salary bases decline, as investors cast more scrutiny over remuneration packages.
But while fixed pay has decreased, cash bonuses have risen, with the bosses of Australia's leading companies still taking home almost 70 times the national average salary.
Research by the Australian Council of Superannuation Investors and proxy advisory company Ownership Matters shows the average fixed salary for an ASX 100 executive fell 2.6 per cent to $1.9 million in the 2012 financial year. Including bonuses, Australia's top bosses took home an average of $4.7 million - only marginally lower than $4.72 million in 2011.
The 10-year trend, however, is much more stark, with executive fixed pay increasing almost three times as fast as inflation since 2002, and nearly 70 per cent faster than average wages growth.
Westfield co-chief executives Peter and Steven Lowy were the highest-paid during the period, out-flanking the nation's richly paid bank chiefs. Their collective packages were worth $21 million for the year, excluding vested equity incentives, putting them above ANZ boss Mike Smith with $9.6 million. However, Mr Smith's salary was almost on par with the Lowy brothers' combined earnings when taking into accounted vested shares, which put the banker's pay at $19.1 million.
Westpac boss Gail Kelly, former BHP chief Marius Kloppers and James Hardie head Louis Gries also made the top five best-paid list for the year, taking home more than $9 million each before share interests. ACSI chief executive Ann Byrne said the decline in fixed pay - which does not include bonuses or shares in the company - was a result of a higher level of investor scrutiny since the global financial crisis and the introduction of the two-strikes rule on remuneration.
"The market is responding to shareholder concerns over continual pay increases," she said, adding the trend was likely to continue downwards as investors and the community continued to put pressure on company directors.
"Boards should be able to relate increases to executive pay to the increases of pay across an organisation."
Chief executives of the top 100 listed companies earned 67 times the national average in the 2012 year - the same as 2011 and considerably less than before the crisis in 2007, when salaries peaked at 94 times the national average.
The median fixed pay in 2012 was the highest in the history of the study, at $1.95 million, reflecting a standardisation of high executive pay across the companies.
Martin Lawrence, of Ownership Matters, said there had been a trend of companies accepting bonuses as the norm, rather than something measured by performance. "You are much more likely to get a bonus than you were 10 years ago, and that bonus is much, much bigger," he said. "Compared to four or five years ago, bonuses have come to be viewed as an entitlement. It's a news story when a CEO says they are forfeiting their bonuses, and it shouldn't be."
The average cash bonus for an ASX 100 executive rose 4.8 per cent to $1.32 million.