Top executives' pay rises at more than double the rate of inflation

Bosses at some of the largest listed companies recorded average pay rises more than double the rate of inflation over the past year, according to the report released by the Governance Institute of Australia.

Chief executives of companies listed on the Australian Securities Exchange (ASX) received an average 15 per cent base pay rise, while those business leaders who held the title of managing director enjoyed a 14 per cent pay bump.

Bosses heading Australia’s top 200 companies, of those surveyed, did even better, with a fixed average pay hike of 19 per cent.

That resulted in a median base pay figure of $1.1 million for a CEO with an ASX 200 company, while average pay for those holding a managing director title was $1.6 million.

But 52 per cent of listed-company managing directors and 51 per cent of CEOs were eligible for performance bonuses, with an average maximum of 89 per cent for managing directors and 72 per cent for CEOs.

For executives heading not-for-profit organisations and non-listed firms, the average pay increase was about 9 per cent.

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After years of moderate pay rises, the 2023 figures revealed a big hike, the Governance Institute’s chief executive Megan Motto said.

“These are significant increases off the back of several years of relatively small rises in fixed pay for executives,” she said.

Currently the minimum wage sits at $21.38 per hour or $812.60 per 38 hour week (before tax).

Business leaders warned the increase would add to company costs and could potentially add to inflationary pressures.

The new rates will apply from July 1.