Annual report shows CEO figures setting new record amid pandemic cutbacks
Australia’s highest-paid CEO made 420 times the average wage in 2019, according to the latest figures from the Australian Council of Superannuation Investors (ACSI).
Andrew Barkla, CEO of IDP Education, a firm that specialises in placing international students in the world’s top universities, made more than $37.7m last year – or upwards of $103,000 per day.
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Much of his earnings came from exercising share options he was granted before IDP Education became public in 2015. The CEO also received a bonus of $683,000.
Barkla – the first CEO from outside the ASX100 to top the list – made $7m more than Paul Perreault of biotechnology firm CSL, who earned $30.5m and sits at the No.2 spot.
10 highest-paid CEOs in FY19:
1. Andrew Barkla, IDP Education – $37.7m
2. Paul Perreault, CSL – $30.5m
3. Philippe Wolgen, Clinuvel Pharmaceuticals – $20.6m
4. Michael Clarke, Treasury Wine Estates – $19.8m
5. John Guscic, Webjet – $16.4m
6. Greg Goodman, Goodman Group – $14.9m
7. Robert Kelly, Steadfast Group – $14.4m
8. Alan Joyce, Qantas Airways – $12.2m
9. Colin Goldschmidt, Sonic Healthcare – $11.9m
10. JS Jacques, Rio Tinto – $10.3m
IDP Education maintains Barkla’s pay is “consistent with market benchmarking” and that the company’s stock performed well at the time, the ABC reported.
“IDP Education’s market capitalisation rose from $660m at IPO to $4.4bn at 30 June 2019, in turn resulting in significant value creation for shareholders of the company,” an IDP representative said.
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Exercising restraint
Prior to the pandemic, more companies had already begun exercising caution in how they structured executive pay, including bonuses, ACSI data showed.
In 2018, for example, only seven eligible CEOs received zero bonus. One year later, the number grew to 25 CEOs; 12 of them belonged to ASX100 companies.
The median fixed pay also fell slightly to $1.76m in FY2019, from $1.95m in FY2012, ACSI found.
“More boards are using sensible discretion to rein in outcomes for senior executives,” said Louise Davidson, the council’s CEO.
After years of “engagement and scrutiny from investors,” boards are now showing a greater level of restraint – and this is encouraging, Davidson said.
In the midst of a global crisis, boards need to consider how their executive pay and bonus schemes play out before the public, especially among Australians facing economic hardship due to the crisis, Davidson said.
Last month, leaders from Australia’s $162bn sovereign wealth fund, Future Fund, advised organisations to exercise discretion in deciding on remuneration packages, HRD reported.
“Management should not be disincentivised to act in the long-term interests of the company. However, company boards should understand that shareholders will likely expect moderation of remuneration outcomes in these cases,” the fund leaders said.
