The chief executives of Australia’s biggest companies have earned more money since the start of 2020 than the average worker will make all year.
A day after former Boeing CEO Dennis Muilenburg was handed $90 million for leaving the scandal-plagued aeronautics company, the average ASX100 CEO has already earned what most would deem a year’s wages.
And that comes despite a banking royal commission which claimed the scalps of numerous CEOs and prompted regulator APRA to consider tighter rules for pay cheques.
On average, full-time workers in Australia earn $1633.80 a week, or roughly $84,950 a year.
The chief executives of Australia’s largest 100 listed companies, however, received an average annual income of $5.66 million in the 2018 financial year, according to the Australian Council of Superannuation Investors (ACSI).
That works out to around $108,846 a week before tax.
Even after tax, someone earning that much each year would take home about $58,205.83 per week – 68.5 per cent of the average worker’s pre-tax annual income.
In 2018, Australia’s top-earning chief executive, Qantas head Alan Joyce, was paid as much as 281 workers earning the average salary.
Bonuses or ‘at-risk’ pay make up part of the large sums ASX100 CEOs receive, but ACSI chief executive Louise Davidson noted more than half those executives received at least 70 per cent of those bonuses.
“The way bonuses are being handed out suggests there is a culture of entitlement whereby supposedly ‘at risk’ pay is not very risky at all,” she said.
“These payments occurred in a year when the royal commission was in full swing, revealing evidence that executives were not being held accountable for poor conduct.”
Only one CEO was denied all bonus payments in the 2018 financial year – a record low based on ACSI’s data.
Wages growth remains slow
In the past year, wages growth has fallen below historic levels (3 to 4 per cent) to only 2.2 per cent annually.
And with the unemployment rate hovering at 5.2 per cent, there’s little prospect of that lifting dramatically in 2020.
Reserve Bank deputy governor Guy Debelle pointed to “growing evidence” that wages growth between 2 and 3 per cent “have now become the norm”.
In the last five years, average wages have only lifted 12.3 per cent.
To further complicate matters, more than half of Australian workers actually earn less than the average annual income.
The median Australian income – exactly between the top and bottom 50 per cent of incomes – in 2018 was only $55,063 based on numbers given to The New Daily by Treasury.
The high incomes paid to ASX100 chief executives and other senior business leaders work to drag the average up, masking the larger disparity between workers and their bosses.
Scandal-plagued executives walking away with millions
On Monday, aeronautics giant Boeing announced former chief executive Dennis Muilenburg – who was forced out following two plane crashes that killed 346 people – will not receive a severance payment or a bonus for 2019.
Despite missing out on those payments, Mr Muilenburg will still pocket $US62.2 million ($90 million) in retirement benefits – which US senator Elizabeth Warren described as “corruption, plain and simple”.
But these so-called ‘golden handshakes’ aren’t exclusive to the US, and many Australian executives have received similar perks following their own scandals.
Ian Narev, the former Commonwealth Bank chief executive who told staff to “temper [their] sense of justice”, walked away with $12 million in shares – and rights to another $12 million further down the track.