A 10-year study of ASX 100 companies has found that while their share values increased by just 31 per cent, the pay packages of their chief executives more than doubled.
A report to be released today by the Australian Council of Superannuation Investors says the average chief executive's total pay in 2010 - $4.9 million - was slightly up on 2009. While it was nearly 10 per cent below the 2007 peak, it still remained 9.3 per cent higher than the 2006 average.
Members of the council manage more than $300 billion in retirement savings and conduct the report to focus companies on the idea that executive pay should reflect long-term, sustainable performance.
Putting chief executives' pay and performance under the microscope was further bolstered this year by the new ASX ''two strikes'' policy. If more than a quarter of shareholders vote against the remuneration report at two successive annual general meetings, a vote can be taken to spill directorships.
The report shows chief executive pay has felt some of the pain of the global financial crisis - average fixed pay fell 4.4 per cent to $1.92 million between 2009 and 2010. For the first time in a decade, average weekly ordinary full-time earnings and inflation increased faster than the chief executives' fixed pay.
But over the decade, their 133 per cent increase in median pay and 190 per cent increase in bonuses far outstripped average wages growth (53 per cent) and inflation (28.6 per cent).
"The past 10 years have been far better for CEOs of top 100 companies than investors given the annual cash take of a CEO from a large company has almost doubled over the decade," the council's chief executive, Ann Byrne, said.
She said that in the wake of the GFC, regulatory and shareholder efforts to ''reduce the potential for executives to receive cash-based windfall gains based on unsustainable performance has been successful in many large Australian companies''.