Bogus CEO bonus ‘rort’

AUSTRALIA’S biggest shareholders have taken a swipe at the low performance hurdles set by company boards for chief executive bonus payments, as total executive pay levels remain flat.

The Australian Council of Superannuation Investors said boards were allowing bonuses to be paid for “normal” job expectations.

“Investors reasonably assume that bonuses will only be awarded for exceptional performance, over and above normal expectations,” ACSI chief Louise Davidson said.

The high rate of payouts indicated that the bonuses “bear little relation to performance”, Ms Davidson said.

Despite some companies cutting bonuses this year, including that of a big four bank chief, Ms Davidson said the payouts demonstrated the lack of understanding and low standards that boards put in place.

Its latest survey found 86 per cent of CEOs in ASX 100 companies were paid a bonus last year.