Bonuses soar for Australia CEOs as workers struggle for pay

File photo showing building and skyscrapers in Sydney, Australia, on March 18, 2018.
File photo showing building and skyscrapers in Sydney, Australia, on March 18, 2018.ST PHOTO: NG SOR LUAN

SYDNEY (BLOOMBERG) - Surging bonus payments has pushed pay for Australia's chief executive officers to a record high at the same time stagnant wage growth prevents the bulk of the country's workers from seeing their incomes rise.

Bonus payments rose 18 per cent last year and have increasingly become a "sure thing" for executives, results from a survey commissioned by the Australian Council of Superannuation Investors showed.

The group, whose members collectively manage A$2.2 trillion (S$2.2 trillion) in pension fund assets and own 10 per cent on average of every company listed on the S&P/ASX 200 Index, said it will increase scrutiny of payments and recommend members vote against excessive awards.

Rising rewards at the top of Australian businesses come at a time when the vast majority of workers are struggling. Wage growth hasn't reached 3 percent for five years and less than half of Australians hold permanent, full-time jobs with leave entitlements.

"At a time when public trust in business is at a low ebb and wages growth is weak, board decisions to pay large bonuses just for hitting budget targets rather than exceptional performance are especially tone-deaf," ACSI CEO Louise Davidson said. "This may be a sign that boards have lost sight of the link between a company's social license and the expectations of communities and investors."

Davidson said ACSI would look closely at bonuses when earnings season gets underway early next month. "If they're not transparent and reflective of performance, we will be recommending that our members vote against those remuneration reports."

For once, it's not pay at the big four banks that's in focus, with none of the major retail banks' CEOs featuring in the top 10 overall pay list for the first time in the survey's 17-year history.

Read how Macquarie is facing retail shareholder opposition over pay at its AGM The highest paid CEO in Australia - when reported pay was adjusted to include value of equity that vested that year - was Don Meij of Domino's Pizza Enterprises Ltd. with A$36.8 million.

The figure compared to his reported pay of just A$4.7 million, ACSI said.

Peter and Steven Lowy of Westfield Corp. came in second on A$25.9 million.