Only eight chief executives of Australia's 100 biggest listed companies missed out on a bonus last year, says a new report that suggests performance hurdles for many bosses should be higher.
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The Australian Council for Superannuation Investors' annual CEO survey says that although chief executive pay has dipped slightly in recent years, performance bonuses typically worth more than $1 million are being paid to a clear majority of corporate chiefs.
The report said that even though bonuses should be for exceptional performance, the vast majority of the 83 ASX 100 chief executives included in the study received a bonus last year. The typical bonus was worth $1.49 million, about $100,000 less than a year earlier.
The figures also showed that when a CEO was granted a bonus, they were typically paid almost 70 per cent of the maximum amount.
Typical fixed pay for an ASX 100 chief was $1.79 million, a 4.4 per cent increase on a year earlier, but below the peaks of previous years.
Taking into account shares issued to CEOs for previous performance, the total pay received by the median head of an ASX 100 company was $3.78 million, down slightly on the two previous years.
Although the number of CEOs who did not receive a bonus doubled compared with the previous year, chief executive of ACSI, Louise Davidson, said the figures suggested that in many companies, bonuses did not adequately reflect performance.
"Investors reasonably assume that bonuses will only be awarded for exceptional performance, over and above normal expectations," Ms Davidson said.
"The prevalence of CEO bonuses at consistently high levels raises serious questions about the way performance hurdles are being designed and applied."
ACSI, which represents major not-for-profit investors including industry superannuation funds, said it wanted to see greater variability in the pay given to executives to prove they were being "appropriately stretched" for the large sums they were paid.
The report comes after the Commonwealth Bank board this month said it would pay no short-term bonuses to any of its top executives this year as a result of the bank's alleged mass breaches of anti-money laundering laws - a move Ms Davidson supported.
"We welcome recent examples of the use of board discretion to reduce bonuses. However, we can't help wondering why these executives would have qualified for any payments in the first place," she said.
