21/01/2010 - 00:00

Downward pressure on CEO pay

21/01/2010 - 00:00

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REMUNERATION for chief executives in the not-for-profit sector has fallen for the first time in almost 10 years, dropping nearly 2 per cent on 2008 figures, according to the Enterprise Care Not for Profit Remuneration Report.

REMUNERATION for chief executives in the not-for-profit sector has fallen for the first time in almost 10 years, dropping nearly 2 per cent on 2008 figures, according to the Enterprise Care Not for Profit Remuneration Report.

The comprehensive report, which details information on the remuneration of 16 senior positions in the not-for-profit sector, contains benchmarking data from the past financial year, tracking trends in remuneration levels since 2000, when the first report was released.

With data covering nearly 1,800 positions, the report, surveyed during July and August last year, is said to be one of the most detailed on remuneration in Australia’s not-for-profit sector.

The moderate decline in chief executive pay highlighted a general trend in the NFP sector, with the remuneration report also finding that, on average, almost all other senior management positions surveyed also reported falling incomes in 2009.

But while remuneration has fallen for the majority of not-for-profit executives, there is some good news in the sector, with the report revealing that female chief executives managed to gain some ground lost in 2008, bridging the male-female remuneration gap by 3 per cent.

The report found that female chief executives now earn about 82 per cent of their male counterparts’ incomes, up from two years ago, but still below the record high of almost 87 per cent in 2004.

However, for all other senior management positions, women earned as little as 72 per cent of their male counterparts’ income working in the same role, the report says.

The publications director/manager position was the only role in which women earned more than men.

Philanthropy Australia spokesperson Vanessa Meachen said the reduction in the male-female remuneration gap was indicative of the maturity of the NFP sector in Australia, which was female dominated.

She said while the slight decline in executive pay highlighted the struggles of NFPs resulting from the global financial crisis, she did not expect the trend to continue.

“I think the drop in pay is indicative of the not-for-profit sector where income has gone down, in some cases quite substantially,” Ms Meachen told WA Business News.

“The global financial crisis had a huge impact and I think there is, or there was, the perception that things are going to get worse.

“But I don’t see this being part of a growing trend because the not-for-profit sector already has problems attracting and retaining people because the salaries are so low, so I’d say that this decline really is a reaction to the global economic crisis.”

Volunteering WA chief executive Mara Basanovic said the decline in CEO remuneration was a worrying sign, as the NFP sector already lagged behind government in terms of pay by as much as 40 per cent, and even further behind industry.

Ms Basanovic said Volunteering WA called on the federal and state governments to boost funding to the NFP sector in a bid to bring CEO pay packets on par with other industries, adding that her organisation was forced to freeze salaries and cut staff hours as a result of the global financial crisis.

 

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