Base salaries for CEOs and managing directors in Australia have risen by double digits in the last year, according to the national Governance Institute of Australia-McGuirk 2024 Australian Executive Remuneration Survey released on Wednesday.
In comparison, general staff saw their pay lift by an average of 5 per cent over the same time.
The Institute’s annual research surveyed 1,089 boards this year across the public, private and not-for-profit sectors. And the differences between executive pay and the salaries of general workers is stark.
CEOs of ASX-listed companies saw their base pay rise by an average of 14 per cent, while managing directors got an 11 per cent increase. Nearly half of those survey also received bonuses.
“The rise in average pay for top executives comes despite inflation falling from highs of around 7 per cent to 3.6 per cent in the past 12 months,” the report notes. “The Fair Work Commission recently increased the minimum wage by 3.75 per cent.”
The average fixed remuneration of a CEO at an ASX 200 company comes to $1.37 million, and for managing directors, they enjoy $1.88 million a year.
CEOs in the information, media and technology sectors had the highest average fixed salaries at nearly $1.05 million, followed by super funds at $607,000. Those in the education and training, retail trade and administration and support sectors sit at the lower end of the spectrum, with a base pay of under $300,000.
Around half of all board directors received an increase in pay, with those from listed and private sector organisations receiving remuneration increases of between 8-9 per cent, on average.
Among managing directors, those with the highest average pay were leaders at junior mining, rental, hiring and real estate and electricity, gas, water and waste companies.
Is the data clear?
Even though pay bands are public information, the research firm (McGuirk), who crunched the data on behalf of the Governance Institute, reported that “there was not enough data from Government and Super Funds regarding remuneration percentage increases” to provide a summary of the results of a year-on-year percentage increase on government salaries.
When it came to confessing their actual salaries for McGuirk’s benchmarking purposes, senior public servants were “a statistical no-show” as The Mandarin put it.
Speaking to the large sums that executives are reaping, Governance Institute CEO Megan Motto said: “At first glance these numbers in their raw form don’t really pass the pub test.”
“They are eye-watering sums for average Australians,” she said.
This is especially the case against the backdrop of the nation’s cost-of-living crisis and the fact that many Australians are still waiting for the minimum wage to increase next month, Motto said.
However, she notes that context is important when looking at the figures, saying “these companies are the largest organisations in the country, they average around $50 billion of market capitalisation each.”
In recent years, these ASX-listed companies have also suffered reputation damage from their business practices. One example of this is Qantas, which faced legal action from the Australian Competition and Consumer Commission last year.
“It will be up to those investors and shareholders to make their voices heard if they feel there are reputational risks in not meeting community expectations,” said Motto.