imcrookonit
Ex Member
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THE salaries of some top-100 chief executives rose during the global financial crisis as their companies bled.
The salary increases came during one of the worst share market downturns in memory.
Analysis by the Australian Council of Super Investors released yesterday showed the median bonus for chief executives rose 3.5 per cent last year to $1.207 million.
"Boards have to stop treating these executives like demigods," ACSI strategist Phil Spathis told BusinessDaily yesterday.
"They have to stop placating executives who threaten to walk with big retention packages and instead align their pay with their companies' performance.
"When a board argues they fear losing key executives unless they are well remunerated, we ask 'Where are they going to go?' "
Using data collated by ISS Governance Services, formerly RiskMetrics, the research covering the ASX 100 revealed the number of chiefs receiving a bonus greater than $2 million also increased to a quarter of the total last year.
ACSI represents super funds that manage $250 billion and invest 40 per cent of it in Australian stocks.
The highest paid Australian chief, Westfield's Frank Lowy, was paid more than $30 million in 2008 and '09, including bonuses that made up almost half his pay packet.
But ACSI said that in both those years property revaluations saw Westfield report statutory losses and its security price declined from $21 in 2007 to $12.95 and $12.55 in the subsequent two years.
The head of Fortescue Metals Group, Andrew Forrest, remained the lowest paid chief on a total pay of $223,877 plus a $15,400 bonus, even though the miner's return on shareholders equity (ROE) soared 129 per cent last year.
However, Mr Forrest's equity in Fortescue was estimated at $3.7 billion based on the share price at June 30 last year.
His counterparts at Rio Tinto and BHP Billiton, on the other hand, were rewarded handsomely despite their companies' ROE falling.
BHP's Marius Kloppers received a base salary of $3.8 million plus bonus and long-term incentives of more than $10 million for a total pay of $14 million.
Meanwhile, ROE at BHP plummeted from 45 per cent to 15 per cent between the end of financial years 2008 and 2009.
A BHP spokeswoman defended Mr Kloppers' pay, saying the company had "responsible remuneration practices designed to attract and retain the people we need to run our business".
She added the mining chief's 2009 bonus was about 4 per cent lower than the previous year.
At Rio, Tom Albanese collected more than $11.5 million in total, including bonus and incentives worth nearly $8 million, while the miner's ROE fell one percentage point to 15.11 per cent.
In 2009, Leighton Holdings' ROE was at its lowest level since 2004 but chief executive Wal King earned 34.2 per cent more that year than the $8.26 million he collected in 2004.
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