Fat cat CEOs’ hidden pay in the spotlight

A BUMPER payday at Qantas and warnings that shareholders are only seeing “the tip of the iceberg” when it comes to executive pay have thrust the issue back in the spotlight.

And, as always, corporate Australia continues to belt out some blockbuster numbers.

Qantas chief Alan Joyce (pictured) entered rarefied air when it emerged last week he was awarded a 490 per cent pay rise for the year to June, to $11.9 million.

That is 100 times more than the average Qantas worker.

Australian Services Union national secretary Linda White labelled Mr Joyce’s remuneration “a kick in the guts” to the Qantas workforce, which is in the midst of having 5000 positions culled. “You can’t help but think if he had not have got that massive pay rise, just how many jobs would have been saved,” Ms White said.

With the annual reporting season at a close, corporate Australia’s remuneration details are beginning to trickle out.

James Hardie chief Louis Gries collected $US11.7 million for the year to March, or 131 times the average wage at the building products maker.

The Commonwealth Bank’s Ian Narev collected $8.3 million in the year to June – 74 times the average CBA wage – while the $16.5 million Macquarie Group chief Nicholas Moore pocketed was 60 times its average worker wage.

The numbers are big and they are likely to be a lot bigger if the findings of a new report by the Australian Council of Superannuation Investors are anything to go by.

The report found the nation’s 10 highest-paid corporate chiefs collec- tively reaped $70 million more in pay and perks than the $99.6 million that was reported in the last annual reports given to shareholders. Stock options, performance rights and the vesting of shares under longterm incentive schemes account for the difference

ACSI chief Louise Davidson says the difference mainly comes about because lucrative long-term share options are reported at their issue price, rather than the higher prices they are ultimately exercised at.

“Statutory reporting is, perhaps, disclosing only the tip of the iceberg in terms of the wealth accruing to senior executives,” she said.

Australian Shareholders’ Association chairwoman Diana D’Ambra said accounting standards that call for companies to assess the “fair value” of stock-linked remuneration have been a longstanding issue in trying to clarify just what an executive takes home. “Fair value can mean a lot of different things to a lot of different people,” she said.