Goyder takes new CEO package

RICHARD Goyder (right) formally took the reins at Wesfarmers this week, with a salary package that will make him very well rewarded but which is different in key aspects from the packages offered by most other major companies. Wesfarmers announced last May that Mr Goyder would succeed Michael Chaney as managing director. Mr Goyder is expected to receive total remuneration of about $4.5 million, which will make him the highest paid chief executive in Western Australia, according to the WA Business News 2004 Best Value CEO survey. The most unusual aspect of Mr Goyder’s package is that it contains no short-term incentive, in contrast to nearly every other major listed company in Australia. Chairman Trevor Eastwood said the board believes the chief executive “should be judged, and rewarded, based on performance over an extended period”. Another common feature excluded from Mr Goyder’s employment contract is a fixed term. “To my mind I don’t think a fixed term adds anything,” Mr Eastwood said. “If anything it is to the detriment of shareholders.” Mr Eastwood said the starting point for the board was deciding the appropriate level of total remuneration, which he said was based on a review of top 20 industrial companies in Australia. Mr Goyder’s package will include a fixed annual salary of $2.25 million. (By comparison, Woodside chief executive Don Voelte, whose company is the largest in WA by market value, receives a fixed annual salary of $1.35 million.) Mr Goyder will also participate in Wesfarmers’ long-term incentive scheme, under which he may be granted shares based on increases in shareholder wealth, as measured by dividend payments and the growth in shareholders’ equity. Mr Eastwood said that “given good performance” the amount available under the incentive scheme would be similar to Mr Goyder’s fixed salary, and would be capped at twice the fixed salary. He said having half the total remuneration in the form of shares was relatively uncommon.

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