Millionaires’ club growing

The number of Western Australian chief executives earning more than $1 million increased to 37 last financial year, helped in most cases by bonuses and share options.

The total is a big jump from the 22 millionaires featured in the WA Business News’ 2004 CEO survey.

WA’s biggest industrial company Wesfarmers once again dominated the list, with seven people earning more than $1 million.

The list was headed by former managing director Michael Chaney, who earned a total of $6.1 million in his final year at the highly profitable conglomerate. This does not include the retirement payout he is due to receive.

To put this in perspective, Mr Chaney ranked only 21st in The Australian Financial Review’s recent national salary review.

Mr Chaney’s successor, Richard Goyder, earned $1.8 million last year and is expected to earn about $4.5 million in the current financial year.

When Mr Goyder’s new package was announced earlier this year, Wesfarmers chairman Trevor Eastwood said the total income was set at a level that would be competitive with other top 20 industrial companies in Australia.

Referring again to the AFR review, Mr Goyder’s expected 2006 income would rank him 28th in the national list of chief executive incomes.

Other Wesfarmers executives earning more than $1 million include finance director Gene Tilbrook and the managing directors of its various operating divisions, such as John Gillam and David Robb.

While most shareholders accept Wesfarmers’ remuneration practices as appropriate for a company of its size and success, it is notable that shareholders speaking for 8 per cent of its shares voted against the remuneration report at the recent annual general meeting.

Foodland Associated’s Trevor Coates was the second highest paid chief executive in the state, with a total income of $2.8 million.

He was closely followed by Rio Tinto Iron Ore chief executive Sam Walsh, who earned a total of $2.7 million.

Multinational companies such as Rio Tinto and BHP Billiton may have multiple executives in Perth earning in excess of $1 million, and would certainly have plenty of people earning more than most local chief executives.

However, given that public companies only disclose the income of their directors and the top five executives below board level, the income of many highly-paid executives is never made public.

Of the 37 people in the millionaires’ club, only nine have a base income of more than $1 million.

These include Messrs Chaney, Goyder, Coates and Walsh.

Others in this select group are Woodside boss Don Voelte, West Australian Newspapers chief Ian Law, Multiplex’s Sydney-based managing director Andrew Roberts, and Melbourne-based John White, who is a director of GRD and chief executive of its subsidiary Global Renewables.

Several executives earned in excess of $1 million because they received big cash bonuses last year.

This group includes Great Southern Plantations’ John Young, Iluka Resources’ Mike Folwell, Consoli-dated Minerals’ Michael Kiernan and Macmahon’s Nick Bowen.

The highly profitable Great Southern is punching well above its weight in the millionaires’ club.

As well as Mr Young, senior executives Cameron Rhodes and Phil Butlin both received $600,000 bonuses last year, putting them well above the $1 million mark.

Other people who made the list did so because they were granted highly valuable share options during the year.

They include Mt Gibson Iron’s former managing director Brian Johnson and a number of small biotech stock executives (see biotech report).