While thousands of Australians lost their jobs or had their working hours cut during the coronavirus pandemic, only one in five of Australia's biggest companies slashed CEO pay, new analysis has revealed.
According to a new report by CGLytics, only 61 of 300 of Australia’s largest companies reported lowering director or CEO remuneration from March 2020 until the beginning of August 2020.
Of the 61 companies, 55 of the ASX300 companies modified pay for both CEOs and directors; five lowered pay for just the CEO, and one company lowered pay for directors.
Overall, however, these pay cuts only amounted to 2 per cent of ASX300’s realised CEO pay.
Only two companies reduced short-term bonuses for executives: Flight Centre and retail property group Vicinity Centres.
Flight Centre slashed senior executive pay and directors by half until at least the end of June, and also had to kiss goodbye to all of their bonuses for the 2020 financial year.
Vicinity Centre cut executive salaries by 20 per cent and also cancelled short-term incentives, though the pandemic’s impact meant the company’s property values were lowered “significantly”.
“Despite the appeal of executive pay cuts, they make up a small portion of what executives receive throughout the year,” the report said.
“A well-meaning but insignificant percentage of executive pay cuts against their total remuneration can cause concern for shareholders, especially for companies that have resorted to laying off employees and closing stores.”
CGLytics CEO Aniel Mahabier said the CEO pay cuts did not go far enough.
“In the midst of the crisis, various Australian companies implemented strategies to maintain cash positions, we are still not seeing meaningful sacrifice at the senior level,” he said.
“With only 60 companies making CEO pay adjustments due to the pandemic, decisions around executive pay are going to be difficult to justify as unemployment remains high and share prices remain low.
Many Australian companies are likely to find themselves in the position to defend their pay practices while being scrutinised by proxy advisors, investors and the society this proxy season.”
In early March, Qantas CEO Alan Joyce announced that he would not be accepting his usual salary until July as the Flying Kangaroo was crippled by the grounding of flights.
Joyce was Australia’s highest-paid CEO in the 2018 financial year, taking home $23.88 million.
More recently, little-known CEO of IDP Education Andrew Barkla won the title of highest-paid CEO, taking home more than $37.76 million last year.
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