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While debate rages as to whether a 5.75 per cent pay rise for workers on award wages will be inflationary, a new report reveals the nation's big business leaders received an average 15 per cent base pay rise.
Key points:
- Listed company CEOs saw an average 15 per cent increase in pay over the past year
- The people running not-for-profits and non-listed companies generally saw pay rises closer to 8 or 9 per cent
- The median listed company CEO base pay was $1.1 million, with the median managing director on $1.66 million
The report, prepared by McGuirk Management Consultants for the Governance Institute of Australia, surveyed 1,167 boards from across the public, private and not-for-profit sectors, and included 226 share market-listed companies.
Among the key findings were that chief executives of ASX-listed companies received an average 15 per cent base pay rise, while those who held the title of managing director saw a 14 per cent pay bump.
Those running one of the nation's top 200 companies recorded an even bigger average fixed pay increase of 19 per cent.
That left the average base pay of an ASX 200 managing director, amongst those firms that responded to the survey, at $1.6 million, while the average pay of those titled CEO was just over $1.1 million.
However, more than half of listed-company managing directors and CEOs were eligible for performance bonuses, with an average maximum of 89 per cent for managing directors and 72 per cent for CEOs.
The Governance Institute's chief executive Megan Motto said the 2023 data showed a big jump after a period of more moderate pay rises.
"These are significant increases off the back of several years of relatively small rises in fixed pay for executives," Ms Motto said.
"With AGM season looming, boards will need to have a strong narrative around their remuneration policies to stand up to shareholder scrutiny and manage reputation risks."
Most other execs see smaller pay jumps
The big pay rises right at the top didn't completely translate further down the "C-suite", with only 9 per cent of senior executives at ASX-listed companies seeing a pay rise above 10 per cent.
Chief financial officers, who are often the practical second in command in many large firms, were paid around half the base pay of managing directors in the ASX 200 firms that responded to the survey.
ASX 200 company secretaries were typically paid a base level of $350,000, with the average general-counsel pulling in just under half a million dollars a year in base pay.
Although company secretaries (11 per cent) and risk managers (15 per cent) recorded some of the biggest pay jumps, with the ability to earn almost half that base salary again in bonuses.
"These skills too are in hot demand. There are currently around 2,500 jobs being advertised nationally for the role of 'risk manager'," Ms Motto observed.
"Remuneration is a key factor for candidates and, with roles like company secretary now on the skills shortage list, it's not surprising we're seeing some really big jumps in base salaries."
However, just 3 per cent of general staff received double-digit pay increases, according to the survey.
The results are likely to grate with low-paid workers, whose 5.75 per cent award pay rise granted by the Fair Work Commission has been widely criticised by business leaders as excessive and potentially inflationary.
Not-for-profit pay packets revealed
The survey also shed light on non-listed companies and not-for-profit and government organisations, as well as super funds.
The median pay for charity CEOs was $228,000, with community housing and disability not-for-profits typically paying their chief executives just over $300,000 per year.
The typical not-for-profit aged care CEO received $385,000 a year, while those running professional and industry bodies were generally paid around $275,000 per annum.
The CEOs of large government operations received a median salary of $444,000, which declined slightly to $372,000 for medium-sized agencies.
Super fund CEOs were typically paid $568,000 per year with the top 10 per cent earning around the million dollar mark and the lowest paid group still earning around $300,000.
However, the pay increases for not-for-profit leaders averaged around 8 per cent last year, similar to increases for unlisted companies, and well behind the average pay jumps at the top of ASX-listed firms.