Within companies executive pay is not distributed equally.

The concept of pay fairness is usually attributed to the concept of equal pay for equal work (and so conversely, unequal pay for unequal work is ok, not that activists tend to mention this). What is usually missed by advocates for equal pay is the tried-and-true observation that pay also varies with supply and demand. In this article we do not attempt to assess the extent that executive pay varies with work value or supply and demand. However, we are interested in the extent and consistency of pay differences.

Our research considers the pay relativity of ASX 300 executive KMPs relative to their CEO. This follows up on the internal relativity pay analysis of November 2022 (see HERE). The conclusion remains consistent with previous findings: meritocracy and the laws of market demand and supply still reign.

Pay relativity is calculated as the ratio of remuneration between each executive KMP and the company’s CEO. The chart below displays the median pay relativity across the ASX 300 for the entire executive KMP team, as well as for the first, second and third highest paid incumbent in each company.

Figure 1: Median direct report remuneration relative to CEO

The median total remuneration of the highest paid direct report is 52% of the CEO’s pay. The median total remuneration of the second and third highest direct reports are 42% and 39%, respectively, of the CEO’s pay.

The inference is the same as Guerdon Associates’ 2022 internal relativity pay analysis – there is no ‘fairness’ bias among executive KMP pay. That is, pay is not distributed evenly across the executive KMP team. More valued talent still requires better compensation to attract and retain.

Additionally, we analysed the pay relativity between the highest paid and the second highest paid direct report, and between the second and third highest. The figure below illustrates our findings.

Figure 2: Average executive KMP pay relativity, excluding CEO

We compared the results of this analysis with that of the previous research to discern any significant changes. The figure below reflects the change in pay relativity since our analysis in November 2022, calculated as the difference between current median pay relativity and median pay relativity from our previous research. The magnitude of median relativity change for total remuneration is minor (less than 5%).

Figure 3: Change in median pay relativity since November 2022

In conclusion, we can say that pay is differentiated between executive positions, suggesting market factors remain at work.


Statutory remuneration data used in this analysis was sourced from GuerdonData®. Only data for incumbents with at least 3 years tenure at the end of the financial year were utilised. Doing so allows for a robust look at pay trends across the companies. This sample accounts for 168 companies with the remuneration for the CEOs and direct reports disclosed. Companies with financial year end December 2023 were included where available.

© Guerdon Associates 2024
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