Are the 10 highest paid ASX 200 CEOs worth their paypackets?

Do you own shares in any of these companies? Judge whether these chiefs have done justice to their take-home pay.

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The 10 best-paid chief executives in the S&P/ASX 200 Index (ASX: XJO) have been revealed, as investors wonder whether they deserve their massive salaries.

The latest research from the Australian Council of Superannuation Investors (ACSI) did show that the COVID-19 pandemic had an impact on executive pay packets.

Within the S&P/ASX 100 (ASX: XTO), 31% of chiefs received $0 of performance bonuses for the 2020 financial year. Even among those who received something, the relative median amount almost halved.

“The research shows that boards have responded positively to more than a decade of active investor engagement and are now better aligning short and long term pay with investor outcomes,” said ACSI chief Louise Davidson.

“Newly appointed CEOs almost always now start on a salary base significantly lower than their predecessors and bonuses are becoming not just harder to achieve, but more often paid in equity rather than cash.”

How much the ASX 200 top 10 took home, and how their shares fared

But at the top end, chief executives still did pretty well. 

For the first time in 20 years of the ACSI study, a CEO’s take-home pay topped the $40 million mark. CSL Limited (ASX: CSL)’s Paul Perreault took home $43 million, up from $30.5 million the previous year.

CSL’s share price has been flat in the past 12 months. However, it did rise about 38% over the 2020 financial year.

Perhaps reflective of rising commodity prices last year, 5 of the top 10 bosses headed mining or energy companies.

Rank Chief executive ASX 200 company Realised pay Stock performance past 12 months
1 Paul Perreault CSL $43 million (0.39%)
2 Bill Beament Northern Star Resources Ltd (ASX: NST) $31.8 million (30.77%)
3 Greg Goodman Goodman Group (ASX: GMG) $26.9 million 40.72%
4 Shemara Wikramanayake Macquarie Group Ltd (ASX: MQG) $16.4 million 28.64%
5 Jake Klein Evolution Mining Ltd (ASX: EVN) $15.8 million (24.14%)
6 Brad Banducci Woolworths Group Ltd (ASX: WOW) $12.7 million 17.45%
7 JS Jacques Rio Tinto Limited (ASX: RIO) $11.9 million 28.86%
8 Michael Clarke Treasury Wine Estates Ltd (ASX: TWE) $11.3 million 8.53%
9 Kevin Gallagher Santos Ltd (ASX: STO) $11.04 million 35.73%
10 Sandeep Biswas Newcrest Mining Ltd (ASX: NCM) $10.99 million (21.92%)
Source: ACSI, stock performance and table created by author

In recent years there’s been a trend for ASX companies to reduce the cash proportion of chief executive remuneration in favour of equities.

“ACSI has been engaging with companies on executive remuneration to improve outcomes for its members,” said Davidson.

“Boards have worked to ensure remuneration is aligned to the value delivered to investors over the long-term.”

Davidson urged companies to keep an eye on inflated CEO pay in the post-COVID era.

“As the impact of the pandemic subsides, boards will need to keep assessing whether performance hurdles and the value of shares being awarded are appropriate to ensure any new incentives align with gains made by investors.”

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Motley Fool contributor Tony Yoo owns shares of CSL Ltd. and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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