Western Australia’s biggest industrial company, Wesfarmers, has confirmed its status as Perth’s very own ‘millionaires’ factory’, with eight executives earning more than $1 million last financial year.
Western Australia’s biggest industrial company, Wesfarmers, has confirmed its status as Perth’s very own ‘millionaires’ factory’, with eight executives earning more than $1 million last financial year.
That puts it ahead of the state’s biggest resources company, Woodside Petroleum, which had four executives earning more than $1 million.
The proliferation of million-dollar executives reflects the boom times in Perth.
Many executives and company directors reached this milestone courtesy of share option schemes.
Summit Resources and Golden West Resources made a disproportionate contribution – 10 of their directors and executives were granted share options worth more than $1 million last year (see previous page).
When it comes to earning hard cash, big companies dominate the million dollar club.
Nearly all of Wesfarmers’ senior executive team earned more than $1 million.
Wesfarmers’ annual report disclosed that about 61 per cent of executive remuneration is considered to be ‘at risk’.
That means the executives need to meet defined performance targets before they qualify for annual bonuses and for share-based payments under the company’s long-term incentive scheme.
Wesfarmers’ executive directors had an even higher portion of their income ‘at risk’.
Chief executive Richard Goyder, who earned a total of $5.3 million, had 66 per cent of his remuneration ‘at risk’.
Finance director Gene Tilbrook, who earned $3.1 million, had 72 per cent of his income ‘at risk’.
The top earner at Woodside (apart from chief executive Don Voelte) was chief financial officer Mark Chatterji, who earned a total of $1.6 million.
This included a $394,000 cash bonus and about $467,000 in equity-based payments.
Compared with Wesfarmers, Woodside has a lower portion of income ‘at risk’.
The target remuneration mix for its chief executive is to have 55 per cent ‘at risk’, split between short-term and long-term incentives.
The target mix for the CFO is to have 52 per cent ‘at risk’, and for senior executives the target mix is 43 per cent ‘at risk’.
Alinta (prior to its acquisition by Babcock & Brown) rewarded a few of its senior executives handsomely with discretionary bonuses.
Senior executive Chris Indermaur was granted a $1.25 million discretionary bonus because of his role in the AGL transaction, which involved the two companies completing an asset swap after they failed to buy each other.
That lifted Mr Indermaur’s total income to $1.9 million.
Former chief executive Bob Browning was awarded a $750,000 discretionary bonus, taking his remuneration to $2.4 million.
