The majority of ASX 300 listed companies have released their 2007 annual reports with remuneration disclosures. And, as in the past, GuerdonData® is the first publicly available database to capture the results. Readers of GuerdonNews® are the first to receive the latest trend analysis for CEO pay based on “same incumbent” movements.
To validly determine the rate of increase, we look at same incumbent data. That is, we identified the 163 Managing Directors and CEOs who were in the same role for all of the last two financial years. They are drawn from all industries, with ASX 300 company market capitalisation ranging from $41 million to $141 billion.
This is a major methodological difference from increases reported in the recent Australian Financial Review (AFR) special report, which appears to have been based on all full year incumbents, rather than the increases applying to individuals in the same position for two full years. This is important to boards wanting to know what is a fair rate of increase applying to an individual who has occupied the position for the full year.
CEOs of trusts were excluded if they were not full time employees of the trust. CEOs who had received windfall gains from equity arrangements (where a material change had triggered a revaluation) were also excluded.
The median 2007 increase in Total Remuneration (TR) was 17%. The average was skewed significantly higher at 37%. This skewing is largely a result of significant share-based payments. Most of these are in the form of long term incentive (LTI). A LTI is performance hurdled. But a significant number of share based payments do not have performance hurdles and are therefore classified as part of total fixed remuneration (TFR).
Note that each measure of remuneration is assessed independently, so the individual receiving the median fixed remuneration increase is not the same person receiving the median STI increase, etc. Also note that over the two year period some incumbents did not receive a STI and/or LTI. This would be reflected as a zero change in remuneration.
The energy sector and materials sector CEOs received the highest median TR increases at 25% and 24% respectively. The technology sector CEOs received the lowest median TR increase at 5%.© Guerdon Associates 2022 Back to all articles