Rain, hail or shine, it’s pouring CEO bonuses, ACSI report finds
The problem was the $9.8 million loss reported
Rain, hail or shine, it’s pouring CEO bonuses, ACSI report finds
Even as the banking royal commission was lifting the lid on bad behaviour, our biggest companies were filling the pockets of their CEOs with generous bonuses, according to new research.
Peter Taylor, Herald Sun
September 16, 2019 11:59pm
The generous bonuses being lavished on the nation’s leading executives suggest there is a “culture of entitlement” in corporate Australia, according to a major superannuation industry group.
And Australian companies are not getting the message that bonuses should be variable rather than merely being “fixed pay under another name”, the group says.
The
Australian Council of Superannuation Investors says just one chief executive at the nation’s top 100 listed companies failed to receive a bonus in the 2018 financial year — an all-time low in records going back to 2001.
Six chief executives did not receive bonuses in the 2017 financial year.
The group will today release its 18th annual report scrutinising pay for chief executives across the ASX 200 index, which broadly covers the 200 biggest listed companies in Australia.
Among the top 100 companies, the median bonus given to chief executives clocked in at 70 per cent of their maximum entitlements in the 2018 financial year, the report says. That figure has barely changed in four years.
Only 7 per cent of chief executives received less than 30 per cent of their maximum entitlements.
“The way bonuses are being handed out suggests there is a culture of entitlement whereby supposedly ‘at risk’ pay is not very risky at all,” ACSI chief Louise Davidson said.
Ms Davidson noted the group’s report covered a year when the
financial services royal commission was underway, and the inquiry had revealed evidence “executives were not being held accountable for poor conduct”.
It also followed a jump in the rate of “first strikes” against pay reports during annual meetings hosted by top listed companies, she said.
Under Australian corporate law, companies receive a strike if their remuneration reports receive “no” votes of 25 per cent or more.
If a company receives a strike in successive years, shareholders can then vote for a spill of the board.
“Clearly, corporate Australia is not getting the message that bonus payments should be variable and awarded for stretch performance, rather than being fixed pay under another name,” Ms Davidson said in a statement.
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