Figures published on Friday by the Australian Council of Superannuation Investors showed ResMed boss Mick Farrell was the highest paid ASX200 CEO, earning $47.5 million.

News Corporation chief executive Robert Thomson ranked second, earning an astonishing $41.5 million in realised pay; far above the bosses of Commonwealth Bank and Rio Tinto.

Overall, the median pay of CEOs at ASX100 companies fell slightly to $3.87 million over the 2023 financial year, though soaring bonus payments were more than enough to offset the fall.

The massive corporate payouts have come as most Australian workers continue to struggle with the cost-of-living crisis, with real wages growth declining substantially in recent years.

Worker purchasing power has only just begun to lift slightly recently, with headline inflation up 3.6 per cent in the year to March compared to a 4.1 per cent lift in the wage price index.

Executive pay exposed

ACSI’s method of calculating executive pay, called “realised pay” includes both the millions they receive in base salary and the value of company stock they’re handed each year.

At the median, realised pay hit its lowest point in 10 years for ASX100 CEOs. But bonuses remained healthy, with bosses receiving 66.3 per cent of the maximum possible payouts.

Only two ASX100 CEOs missed out on bonuses last financial year, meaning that bosses have more chance of being terminated than missing out on a windfall (24 terminations last year).

Meanwhile, so-called “reported pay” – which includes the estimated value of future incentives – rose strongly in the 2023-2024 financial year, suggesting the possibility of a CEO pay “breakout”.

Reported pay hit a record in the past financial, going over $5 million for the first time and up from $4.73 million in FY17.

“Reported pay levels for ASX 200 CEOs edged up in the year, and that is normally a precursor for much higher realised pay outcomes in the future,” ACSI chief Louise Davidson said.

“Those outcomes, and the necessary performance hurdles, will need to be monitored closely to ensure they are in step with market expectations.

“If this does not happen, we risk seeing a breakout in executive pay which could serve to undermine confidence in Australia’s largest companies.”

Workers struggling

At $3.87 million, median realised pay for ASX200 CEOs is an astonishing 50 times higher than average adult earnings across the economy.

At the top level the figure is far more stark, with ResMed’s Mick Farrell earning 516 times the average adult earnings.

Interestingly, however, the slight decline in CEO pay and wage increases across the economy in the past 10 months meant the gap to average adult earnings for Australians has hit a decade low.

“In FY23 average ASX100 CEO realised pay was 50 times average adult total earnings, down from 55 times in FY22 (the prior low) and only the third time in the past decade the multiple has been lower than 60,” ACSI said.

That’s no comfort for workers struggling with the cost-of-living crisis, however, with recent increases in wages failing to make up lost ground from years of declining purchasing power.

– TND

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