And the boom in pay last year doesn’t necessarily match up with the size of the company. None of the big four banks’ chief executives made the top 20, nor did Telstra’s Andy Penn while BHP’s Mike Henry came in at 15th on the list and Macquarie Group’s Shemara Wikramanayake featured in the 8th spot

There were a number of interesting features of this year’s executive pay report, undertaken by the Australian Council of Superannuation Investors.

The first was the clear evidence of a bounce back in executive remuneration in 2021 after the 2020 year in which many took a pay cut or exercised restraint amid the global financial uncertainty around the COVID-19 pandemic.

But the more salient feature is that while fixed pay rebounded in 2021, it continued a longer-term downward trend - and none of the top 100 CEOs received fixed pay above a more acceptable $3 million.

It is the bonus component of remuneration where the big dollars are made.

There are numerous ways boards measure bonus performance and various hurdles executives have to meet - both financial and non-financial.

One such measure commonly used is total shareholder return (TSR) - which accounts for share price growth and dividends. And it’s noteworthy the highest-paid executives mostly belong to companies that measured well on TSR last financial year.

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There was strong sharemarket growth across the board in 2021- and some executives were able to cash in.

As offensive as these pay packets may seem to the public, it is the shareholders who are paying for them. And it is these shareholders that have the responsibility to approve them (which for the most part they have).

That said, increasing activism from large investors and proxy groups has managed to keep a lid on most of the excesses in rising realised executive pay.

The two strike rule in Australia allows 25 per cent of shareholders to vote against executive pay. It has become a non-binding protest mechanism to air dissatisfaction around company performance and has played a big part in the overall level of pay among the top 100 companies remaining fairly stable over the past 10 years.

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