17/12/2002 - 21:00

High pay at the big end of town

17/12/2002 - 21:00

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SEVEN WA companies paid more than $1 million to their top executive in their latest financial year. The big payers are heavily biased towards WA’s largest companies, ranked by market capitalisation.

High pay at the big end of town
SEVEN WA companies paid more than $1 million to their top executive in their latest financial year. The big payers are heavily biased towards WA’s largest companies, ranked by market capitalisation.

In fact, all of WA’s 12 largest companies – with the exception of Aquarius Platinum – are among the biggest payers.

At the top of the list was Wesfarmers managing director Michael Chaney, whose total remuneration was a WA record at $7.94 million.

By far the biggest component was a $6.72 million performance-based incentive payment, reflecting Wesfarmers’ outstanding profit growth under Mr Chaney’s 10-year tenure. His base salary and benefits totalled $1.22 million, up 6.8 per cent.

Woodside Petroleum’s John Akehurst received more than Mr Chaney in the form of base salary and benefits ($1.39 million). Add to that an incentive payment and an interest free loan, and Mr Akehurst’s total package for the latest financial year (to December 31 2001) came to $2.08 million.

Other CEOs in the $1 million club include Foodland’s Trevor Coates ($1.78 million) and Futuris’ Alan Newman ($1.37 million).

Mr Coates has presided over Foodland’s expansion into Queensland and New Zealand. While Foodland’s share price has weakened over the past couple of months, this follows strong gains over the previous year.

While Mr Newman is renowned as the consummate deal maker, the past year has been disappointing for Futuris, with a 22 per cent fall in net profit.

The high-income earners at public companies included five executives who broke the ‘big company’ pattern.

The most notable exception was Loretta Lee, chairman of Merchant House International. Ms Lee’s total package of $869,527 was nearly one third of the company’s pre-tax profit of $2.8 million for the year to March 2002.

Merchant House is little known in Perth. While the ASX in Perth is its home exchange, the company is incorporated in Bermuda and has its head office in Hong Kong.

Peter Fogarty, managing director of loss-making ERG, did not receive a bonus last year – unlike the two previous financial years – but his ‘base consulting fee’ actually increased to $950,000.

The scale of his remuneration was criticised at ERG’s annual meeting last month by investors who have watched the value of their ERG shares plummet in value.

Consolidated Minerals managing director Michael Kiernan’s total remuneration more than tripled over the past three years to $778,034, helped by a $348,103 performance bonus.  Over the same period, the company has achieved three successive profit increases to $14.1 million.

Consolidated’s annual report explained that the performance bonus was based on a portion of after-tax profit that exceeded a predetermined (15 per cent) return on shareholders’ funds.

Anaconda Nickel and Macmahon Holdings both offered attractive salary packages in order to lure experienced executives as their new CEOs.

Nick Bowen, the former CEO of Eltin, joined rival contracting group Macmahon Holdings in January 2000 when it faced major operational and financial difficulties. He has overseen a major restructuring and recently reported the company’s first annual profit in four years. His reward was total remuneration of $752,906 (including a $100,000 bonus).

Even greater challenges faced Peter Johnston when he left WMC to join Anaconda Nickel in November 2001. Anaconda reported a mammoth loss of $920 million for the year to June 2002 and is currently seeking to raise extra capital to secure its long-term future.

TOP EARNERS LATEST FINANCIAL YEAR

       

Senior Executive

Company

Latest Annual Salary

Rank by Market Cap

       

Michael Chaney

Wesfarmers

$7,938,000 (a)

1

John Akehurst

Woodside

$2,081,110

2

Trevor Coates

Foodland

$1,781,853

4

Alan Newman

Futuris

$1,381,182

8

Peter Johnston

Anaconda Nickel

$1,016,146 (b)

29

Robert Browning

AlintaGas

$1,006,000 (c)

9

Malcolm Macpherson

Iluka Resources

$1,001,731 (d)

5

Peter Lalor

Sons of Gwalia

$987,513

7

Peter Fogarty

ERG

$950,000

16

Loretta Lee

Merchant House

$862,937

n/a

Terry Budge

BankWest

$815,472 (e)

3

Michael Kiernan

Consolidated Minerals

$778,034 (f)

39

Nick Bowen

Macmahon Holdings

$752,906

44

David Gilham

Bristile

$751,000 (g)

11

Ian Law

WA Newspapers

$750,897 (h)

6

John Schaap

Burswood

$651,359

12

Brian Hewitt

Clough

$645,169

13

Source: WABN

Footnotes:

a. Includes $6,716,000 as vested portion of long term incentive payment
b. Seven months actual data (since Mr Johnston’s appointment) has been annualised
c. Six months actual data (due to change in balance date) has been annualised
d. Eleven months actual data (not annualised), excludes retirement benefits.
e. Ten months actual data (due to change in balance date) has been annualised.
f. Includes $348,103 performance bonus
g. Includes $200,000 bonus
h. Four months actual data has been annualised; includes $150,000 commencement and incentive bonuses (not annualised).

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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