Guerdon Associates’ benchmarking of ASX 100 remuneration reveals a narrowing gap between CEO and CFO pay as finance chiefs receive higher percentage increases. While the Australian CEO-to-CFO pay ratio has historically anchored at approximately 2:1, current data indicates that CFOs are outpacing CEOs in total fixed remuneration (TFR) and maximum total remuneration (TR) growth.

Key Takeaways:

• CFOs Outpace CEO Increases: ASX 100 CFOs saw average maximum TR increases of 8.0% compared to 5.9% for CEOs, driven primarily by long-term incentive (LTI) changes.
• Relativity Remains Stable: Despite higher percentage growth for CFOs, the median ratio of CFO to CEO maximum TR increased only marginally from 42.7% to 43.2%.
• ASX 20 Trend Intensity: The narrowing gap is most pronounced in the ASX 20, where CFOs received median TR increases of 10.1% against 3.6% for CEOs.
• Governance Risk Mitigation: Monitoring these gaps can identify “narcissistic” pay structures where an oversized gap signals potential governance problems.

The Bottom Line: Boards must ensure CFO-to-CEO pay relativities align with historical anchors to maintain governance integrity as incentive structures evolve.

Reviewing pay gaps is a quick, shorthand method Guerdon Associates employs to see if there may be any potential governance problem. In particular, too large a gap between the CEO and next highest paid executive may suggest an all powerful and/or narcissistic CEO that may become problematic (for example, see HERE).

A reliable pay gap anchor is the difference between CEO and CFO pay. This has been constant through the decades, with an Australian domiciled CEO to CFO ratio more or less 2 to 1 for salary and total remuneration. BTW, the Australian ratio is narrower than most countries, perhaps due to Australian governance systems and the concentration of large investor capital in just 200 listed companies. Also, the pay gap does vary over a cycle. As economic times tighten, it becomes narrower, and vice versa.

So, could your company have a problem? And is the direction of your gap change indicative of or counter to where we are in the economic cycle? To assist, Guerdon Associates reviewed the year-on-year changes in CEO and CFO maximum remuneration opportunity and the change in the gap.

The sample consists of ASX100 companies as of the latest rebalancing with same incumbent CEOs and CFOs. It excludes companies with no suitable CEO/CFO matches or outliers such as incumbents who elected to receive no remuneration. The remuneration changes and opportunities are current as at the time of each company’s latest AGM.

Tables 1 and 2 below show the CEO and CFO year-on-year % change in total fixed remuneration (TFR), short-term incentives (STI), long-term incentives (LTI) and restricted stock units (RSU), and maximum total remuneration (TR).

Table 1: YoY % Change in ASX100 CEO maximum remuneration

 

Table 2: YoY % Change in ASX100 CFO maximum remuneration

The CFO sample had higher levels of increases than CEOs, with the main driver of change in maximum total remuneration being long-term incentives for both samples.

As CEOs typically have larger remuneration package than CFOs, relativity analysis of CFO to CEO pay was conducted to determine whether remuneration package increases were in lockstep.

Table 3: Prior year CFO to CEO maximum remuneration

 

Table 4: Current year CFO to CEO maximum remuneration

Tables 3 and 4 show that at the median, the ratio of CFO to CEO pay has increased marginally, reflecting that the quantum of remuneration package increases relative to position has not substantially changed.

The analysis was also conducted within smaller subsets of the ASX50 and ASX20 to identify whether the trend differs depending on company size.

Table 5: YoY % Change in ASX50 CEO maximum remuneration

 

Table 6: YoY % Change in ASX20 CEO maximum remuneration

Across the CEO samples, the median year-on-year change for the ASX50 was more modest than the ASX100, while the ASX20 increases were more generous:

• ASX100 TFR increase at median was 2.3%
• ASX50 TFR increase at median was 2.0%
• ASX20 TFR increase at median was 3.0%
• ASX100 maximum TR increase at median was 3.0%
• ASX50 maximum TR increase at median was 2.7%
• ASX20 maximum TR increase at median was 3.6%

Table 7: YoY % Change in ASX50 CFO maximum remuneration

 

Table 8: YoY % Change in ASX20 CFO maximum remuneration

The CFO samples followed a similar trend with median year-on-year changes smaller across the ASX50 and larger in the ASX20:

• ASX100 TFR increase at median was 3.1%
• ASX50 TFR increase at median was 2.5%
• ASX20 TFR increase at median was 5.3%
• ASX100 maximum TR increase at median was 3.7%
• ASX50 maximum TR increase at median was 3.6%
• ASX20 maximum TR increase at median was 10.1%

Looking forward to 2026 – 2027 

Across all samples, common practice was increasing CFO pay at a greater rate than CEOs, though the change in ratio of CFO to CEO is minimal.

The narrowing pay gap confirms the CFO’s rising strategic importance, but Boards must ensure these increases do not decouple from performance metrics. 

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