Nick Hawkins, CEO of Insurance Australia Group (IAG), sees statutory pay skyrocket by 78% to $5.23 million
Australia’s corporate landscape has seen a significant surge in executive pay over the past year, increasing the disparity between the country’s top executives and the average worker.
According to an analysis of fiscal year remuneration reports by Guardian Australia, chief executive officers (CEOs) in Australia’s largest companies are now earning up to 50 times more than a typical worker, exacerbating income inequality as cost-of-living pressures mount.
The 2023-24 fiscal year marked a period of robust growth in CEO compensation across Australia, with many top executives receiving double-digit percentage increases in their pay packets.
This comes at a time when average weekly earnings for Australian workers rose by just 4.6%, says Guardian Australia.
CEO pay in finance, tech, insurance
The disparity in pay increases was particularly pronounced in sectors such as finance, technology, and insurance. The Australian Securities Exchange (ASX) 200, buoyed by strong performances in these sectors, saw an almost 8% rise in 2023-24, inflating the value of incentives and bonuses awarded to executives, according to Guardian Australia.
One notable example is Shemara Wikramanayake, CEO of the Macquarie Group, who earned $29.4 million last financial year, although this represents a slight decline from the previous year.
And Nick Hawkins, CEO of Insurance Australia Group (IAG), saw his statutory pay skyrocket by 78% to $5.23 million, driven by rising premiums in the insurance industry. Similarly, Frank Calabria, CEO of Origin Energy, received a 13.5% increase, bringing his total compensation to $6.7 million during a year marked by sharp hikes in electricity prices for consumers, said the report.
In contrast, Leah Weckert, CEO of Coles, earned $4.7 million in her first full year, up from $3.3 million the previous year. However, her compensation remains well below the $10 million-plus pay packets of her predecessor, Steven Cain, said Guardian Australia.
Wage gap between CEOs, workers
The current pay gap between CEOs and average workers is a stark contrast to the early 1990s when top executives earned approximately 17 times the average worker’s salary. Today, that multiple has ballooned to 50, according to an analysis from the Australian Council of Superannuation Investors (ACSI).
Ed John, executive manager of stewardship at ACSI, expressed concern over the ease with which short-term bonuses are awarded, urging company boards to ensure that these incentives reflect genuine long-term performance.
“It’s important that boards and investors don’t become too cyclical,” John told Guardian Australia, emphasizing the need for a broader assessment of whether strategic goals are being met beyond mere share price movements.
Chief executives in Australia are more likely to lose their jobs than lose their bonus, according to a new report from the Australia Council of Superannuation Investors (ACSI).
