The two chief executives of buy now, pay later (BNPL) company Afterpay, Anthony Eisen and Nick Molnar, shared a record $264m pay packet last year as remuneration for Australia’s top corporate brass rebounded following the Covid-19 pandemic.
Chief executive bonuses, which had been kept down amid market turmoil during lockdowns, rebounded from a record low of 31% of base pay in 2020 to a record high of 76.7% in 2021.
The average chief executive bonus reached a record of $2.31m last year, narrowly beating the previous highest average, $2.3m, recorded in 2017.
Amid sluggish wage growth for ordinary people, chief executive pay among the top 100 listed companies climbed to a record multiple of about 100 times average adult earnings.
The Australian Council of Superannuation Investors (Acsi), which commissioned the research, said it was concerned there was a return to the “bad old days” of bonuses being handed out as a matter of course.
Eisen and Molnar reaped most of their record earnings not through bonuses but through options to buy shares in their company for $1 each at a time when they were trading on the stock exchange for $90 or more.
The share prices of most BNPL companies subsequently collapsed by as much as 90%, but Afterpay was shielded from the worst of the market carnage because it had agreed to sell itself to US fintech Square, run by the Twitter co-founder Jack Dorsey.
Runner-up Paul Perreault, the CEO of biotech company CSL, received $58.9m – which would have been a record if not for Eisen and Molnar’s share-trading bonanza.
Greg Goodman, of property company Goodman Group, was third on $37.1m, Shemara Wikramanayake of Macquarie Group came fourth on $14.7m and the Woolworths boss, Brad Banducci, took fifth at $11.8m.
The research, Acsi’s 21st annual survey of CEO pay, found that three CEOs received their maximum bonus over the past three years: Mark McInnes, who ran Premier Investments for retail billionaire Solomon Lew, David Harrison of property group Charter Hall and Robert Kelly from insurance broker Steadfast.
The Qantas boss, Alan Joyce, was the only CEO in the ASX100 not to receive a bonus in 2020 or 2021, as the airline struggled with grounded planes due to the pandemic.
Ed John, Acsi’s executive manager of stewardship, said it was normal to see bonuses rebound as markets recovered from the pandemic-induced recession.
“The worry is whether or not we return to the bad old days where bonuses at target almost became a given or an expectation,” he said.
He said investors would be paying close attention to the pay results announced by companies after the end of the financial year on 30 June.
“Boards all around Australia are at this very moment considering where the numbers lie for 30 June,” he said.
He said Acsi was also closely monitoring exit payments.
In 2021 these included $4.85m paid by embattled casino group Crown Resorts to departing boss Ken Barton, who an inquiry in New South Wales found engaged in “improper” and “appalling” conduct when he gave a misleading answer about billionaire shareholder James Packer’s access to the company’s financial information at its annual meeting in October 2019.
“The issue of golden parachutes is always a concern for investors, and particularly where you see what is effectively pay for poor performance,” John said.
The research was conducted for Acsi by proxy firm Ownership Matters.
