The median ASX 200 CEO STI outcome was 72% of maximum in FY22 and 61% of maximum in FY23. While some investors may suggest that vesting outcomes for CEOs appear to be relatively high in each of the past two years (and potentially show little variation with performance), these statistics do not tell the whole story.

The recent ACSI CEO pay research commentary suggested CEO STI was not at meaningful risk (see our summary HERE). The figure below sets out the distribution of outcomes each year based on our data. The data suggests that CEO STI is variable. Our analyses published in February also support this (see HERE).

Figure 1: ASX 200 STI outcome distribution in FY22 and FY23

The figure shows that:

• The proportion of CEOs that received an STI in the range 0-20% of maximum increased from 4% in FY22 to 9% in FY23
• The proportion that received an STI at 40% of maximum or less increased from 10% in FY22 to 24% in FY23
• The proportion that received an STI at 80% of maximum or higher decreased from 36% in FY22 to 22% in FY23

That is, while the median outcome in both years was relatively high, the actual distribution of outcomes suggests that STI awards varied considerably between FY22 and FY23 based on performance. It also appears ASX 200 boards did not necessarily lower performance requirements for CEOs in FY23 when many companies would have been impacted by changed market conditions related to rapidly increasing interest rates and cost of living.

We also analysed outcomes by sector. The median STI outcome was lower in FY23 than in FY22 in all sectors except the industrials and utilities sectors:

Table 2: FY22 and FY23 ASX 200 CEO median STI outcome as % of maximum by sector