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01/12/2014
This article looks at the changes to ASX 300 CEO performance-based remuneration received from 2013 to 2014.
Overall there was a small increase in the frequency of short-term incentives (STIs) and no overall change in the frequency of long-term incentives (LTIs). Average STIs increased by 1% and LTIs by 14%. Trends varied across different sectors and company sizes.
Change in Remuneration Structure
Overall, at-risk remuneration has increased marginally, from 53% to 54%.
Table 1 shows the CEO pay mix for 2014 and 2013. Only CEOs who were in the position for both years are included.
Table 1: Remuneration structure
|
| 2014 | 2013 |
| TFR | 46% | 47% |
| STI | 26% | 26% |
| LTI | 28% | 27% |
The following figures show the STI and LTI frequency in 2013 and 2014 by company size. Q1 represents the smallest companies (based on market capitalisation) and Q4 represents the largest.
Figure 1: STI frequency in 2013 to 2014 by company size
Figure 2: LTI frequency in 2013 to 2014 by company size
Pay mix has remained constant from 2013 to 2014, with the only measurable change, an increase in LTIs for larger (Q3 and Q4) companies.
Figure 3: Change in pay mix from 2013 to 2014 by company size
Figure 3 shows the change in pay mix from 2013 to 2014, by company size.
The change in remuneration mix also varied by sector, as seen in Figure 4. The Utilities sector sample size is small and the results should be interpreted accordingly.
Figure 4: Change in pay mix from 2013 to 2014 by sector
Most sectors have consistent pay mix statistics for both years. However, the finance and energy sectors both show an increase in the proportion of remuneration made up of LTIs. The materials sector saw the largest increase in the proportion of remuneration made up of STIs.
The finance sector has the highest proportion of pay at risk at 63% and the consumer sector has the lowest at 43%.
© Guerdon Associates 2024
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