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CEO pay packets not as fat as all that

05 December, 2012

RMIT University researchers have conducted the most comprehensive study to date into the remuneration of Australia's CEOs, through a survey commissioned by the CEO Institute.

To uncover a more accurate picture of the full spectrum of CEO remuneration, the institute commissioned RMIT to conduct an online survey representative of the two million-plus businesses operating in Australia, 99.7 per cent of which are classified as small and medium enterprises.

Institute Chairman and Founder Ken Gunn said: "We often see sensational reports about Australia's high-flying CEOs and their multi-million dollar packages and lavish share options but the big corporations concerned account for a tiny 0.1 per cent of Australian businesses."

The survey was conducted between July and September this year by an RMIT research team led by Associate Professor David Gilbert and Dr Carol Tan in the School of Management.

In all, 369 responses were received from CEOs of companies representative of all industry sectors as defined by the Australian Bureau of Statistics, including for-profit and not-for-profit firms.

The study looked at the total annual salary packages - including wages, superannuation, bonuses and benefits - and found: 38 per cent of respondents received between $100,001 and $200,000; 28 per cent received $200,001-$300,000; 14 per cent received $300,001-$400,000; 8 per cent received $400,001-$500,000; and 6 per cent received $500,001-$750,000.

Only 1 per cent received more than $1 million, 1 per cent received between $750,000 and $1 million and 4 per cent actually earned less than $100,000.

RMIT's survey report suggested these results were largely consistent with average CEO compensation figures in the US, where the average salary package for 2012 was $197,000.

About 52 per cent of CEO respondents indicated that their remuneration was linked to company performance, with public companies were much more likely to structure packages this way than privately held businesses.

The prevalence of performance incentive packages varied directly with the level of salary - from 7 per cent for those receiving less than $100,000 to 42 per cent in the $100,001-$200,000 bracket and an average of 86 per cent across the three higher brackets between $500,000-$1 million-plus.

Contrary to common perceptions, there was no statistical difference between CEO remuneration levels for not-for-profit and for-profit businesses.

"These reports will be published annually to provide a far more accurate and complete picture of CEOs than anything previously available," Gunn said.

"We will be able to track movements in the demographic profile of our business leaders, and present a more balanced picture of how they're paid."

The CEO Institute was founded in 1992 as a peer-to-peer membership organisation for chief executives to connect with and learn from their peers. In 2011, it became the world's first global certification body for CEOs.

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Lou Furbadamo | Monday, December 10, 2012, 10:20 AM
Good to know some private industry high flyers are maybe earning their keep? Too bad, we can't say the same about our gross burdening, ever expanding, duplicating, unmerited, woeful, arrogant snorting mass politician’s & bureaucrat pays, perks & lurks. They just keep unashamedly, irresponsibly steaming ahead at the surely the world’s most outstanding number ones? Wake up Australia & start demanding Efficiency, Value for Tax & Rip-Off Money and a decent Representation and a respectable Economic future! Typically, let me arouse you by pertly asking, “Did we all get some feel good, productive value from just last weeks mass COAG Premier’s sham meeting and feel good, obscenely expensive w**k session”? I can feel the salivating juices and raging goose bump benefits already radiantly permeating through, even though broadening the GST consumption tax was only by-pass mentioned by incredible economic luminary, premier Grabber O’Dazzer. Too bad there’s a recession looming and extra taxing will only worsen the situation! But, Satan Bless their selfish, snorting, greedy little f**king black souls! Eliminate Wasteful, duplicating, shambles of State Governments, sooner rather than later? Small Government is surely the only practical, efficient, smart way to go, for broad Australian industry survival and future all round prosperity! Tears for Cheers, unimpressed Furbo!
terry | Wednesday, December 12, 2012, 1:11 PM
Whilst the pay packets of C.E.O's are above what the general public like to see, what people do not understand is that a C.E.O is like a primeminister or a president they are elected into a particular office of respnsibility to steer the ship and to shoulder this responsibility and take the blame whist some of these onuses on the particular encumbent quickly disappear when the proverbial clump of fecies hits the fan, this is also due to the fact that they make their own rules because their position within their particular envoirment also demands fairly free mental largess in relation to their knowledge and experience but the imbalance of either of the above does not come to notice until it is noticed that the emperor really does not really wear any cloths,and the pay packets do not allways reflect the knowledge and stewardship capabilities of the biggest cog in the engine because this particular payment for service is thrust on them by unsure and innificcient managment levels who are only to willing and eager to offload resposibility and retain their safe positions and permanent pay scales, and when the inevitable happens every now and then and the paricular company starts performing well and eveything is running smoothe and someone decides to challenge the top cog because it looks like it is an easy job and the money and the prestiegios position are excellent motivations the emperor is ousted,and the career exeutive moves on with a new suite of clothes to a new position, or retires, but the position remains the same.cheers Terry