Australia’s top chief executives continue to rake in hefty bonuses on top of their salaries, new analysis shows, despite last year’s banking royal commission undermining public confidence in the business sector.

However, a report by the Australian Council of Superannuation Investors (ACSI), released on Tuesday, also noted a trend in which companies were lowering the base pay for incoming CEOs, deferring benefits and introducing clawback provisions to deal with poor performance.

The study found that only one ASX100 chief executive who was eligible for a bonus missed out in the 2017-18 financial year – Don Meij, the head of scandal-plagued Domino’s. It also found that the median bonus for an ASX100 chief executive was $1.6m, the second-highest in the report’s 18-year history. The number of bonuses handed out to those eligible, meanwhile, was a record for the survey.

“It doesn’t seem credible that every CEO except one performed above expectations,” said Louise Davidson, the ACSI chief executive.

The study investigates “realised pay”, meaning cash and the value of equity vested that year. It also found:

  • The median ASX100 CEO got 70% of their maximum bonus entitlement, a figure in line with the past four years

  • The median realised pay for an ASX100 CEO hit $4.5m

  • Ten CEOs of ASX200 companies realised pay above $10m

  • Five ASX100 CEOs got 100% of their bonus

The bonuses enjoyed by the heads of Australia’s banks have been in the spotlight since last year’s royal commission. More broadly, the study’s findings suggest that chief executive pay across all industries has not been hurt by the negative headlines.

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The report said that of the 158 CEOs whose pay was examined, “147 were eligible for an annual bonus and of this group 140 received a bonus”.

“This is especially troubling at a time when public trust in institutions has been demonstrably undermined by revelations in the Financial Services Royal Commission, and in the wake of a soaring number of ‘first strike’ votes against remuneration reports – including a record 88% vote against NAB,” the report said.

“Intuitively, we would have expected that bonus outcomes would have been lower amid such intense scrutiny from regulators, politicians, the public and investors.”

As it flagged a potential crackdown on banker CEO pay, the Australian Prudential Regulation Authority warned in July there was “an absence of significant downward adjustments to remuneration at executive level”.

It follows the Coalition government’s efforts to curtail banker pay packets with its Banking Executive Accountability Regime.

top paid asx200

Davidson said the report bolstered investors’ concerns that there was no clear link between bonuses and actual performance.

It showed that only 7% of ASX100 CEOs received less than 30% of maximum bonus available to them.

“The main concern that this research highlights is that even though fixed pay seems to have stabilised and hasn’t been increasing, there seems to be a compensation for that going on with the persistent payment of bonuses,” said Davidson, who was paid $336,615 in 2017-18 according to an annual report.

“And so our view is that if some component of remuneration is being characterised as being ‘at risk’, as in you have to perform well to get it, then that’s how it should be treated.”

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Among the top ASX200, the former Macquarie Group boss Nicholas Moore was the only bank chief executive to make the top 10 highest paid last financial year. Moore also received the top bonus, an arrangement described by Macquarie as a “profit share”.

Of the big four banks, the Commonwealth Bank’s Matt Comyn was excluded from the survey as he took his post midway through the 2017-18 financial year.

The highest paid was NAB’s Andrew Thorburn, with a realised pay of $6.2m, which placed him 26th among the ASX100.



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