04/07/2017 - 15:03

Report carves-up remuneration

04/07/2017 - 15:03

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Chief executives at mid-cap companies in Western Australia are better paid than their peers in other states, but those at small companies in WA are worse off, an in-depth remuneration survey has found. Click through to access the report.

Report carves-up remuneration
Allan Feinberg believes many companies should restructure their incentive schemes. Photo: Attila Csaszar

Chief executives at mid-cap companies in Western Australia are better paid than their peers in other states, but those at small companies in WA are worse off, an in-depth remuneration survey has found.

Click here to download the report.

These results emerge from a survey of 900 listed companies by consulting group BDO Remuneration and Reward, led by managing director Allan Feinberg.

The survey is available for purchase from Business News, which has partnered with BDO to launch the new product.

Mr Feinberg said most remuneration surveys focused on the top 100 or top 200 companies on the ASX, leaving big information gaps for small and mid-tier companies.

“There is a huge need for granular information around these companies,” he said.

“This report has easy-to-read, transparent and credible information that companies can use to make pay decisions.”

The survey covers 11 different roles, including chief executive, chief financial officer and company secretary.

The results have been divided into four tiers based on market cap in April: tier four is from $25 million to $125 million; tier three is up to $600 million; tier two is up to $3 billion, and tier one is beyond $3 billion.

They are further broken down by geography and by 10 industry sectors.

Hence, non-executive directors at tier four mining and metals companies can see how their fixed fees compare with the median, which is between $46,000 and $54,000 per annum.

Non-executive directors at tier four IT companies fare slightly better, with median fixed fees between $53,000 and $60,000.

The survey found the median fixed salary for chief executives at all tier four companies (across all industry sectors across Australia) was $320,000.

In WA, the figure was notably lower, at $294,000.

The relativity was opposite for tier three companies, at $515,000 in WA and $499,000 nationally.

Another notable finding was that human resources executives in WA (across tiers two, three and four) are better paid than their peers in other states.

Mr Feinberg said the survey encompassed all elements of pay, including incentive opportunities.

“No-one has crunched the numbers as much as we have,” he said.

Mr Feinberg believes there are opportunities for many companies to optimise their incentive arrangements.

“Too much of the incentives are based on short-term performance,” he said.

“CEOs should be focused on long-term shareholder value, and that means three to five years.”

Mr Feinberg also believes the governance and conditions for equity awards for non-executive directors at many smaller companies can be improved.

“Their incentives are usually linked to the same milestones as the executive incentives, and that defeats the purpose of being independent,” he said.

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