While the banking industry is well known for its multi-million-dollar executive pay packages, the pizza industry is now serving up the biggest rewards to a Brisbane CEO.
Don Meij, the chief executive of listed pizza chain Domino’s Pizza, claimed more than $21 million in salary, benefits and shares in the 2016 financial year.
The big pay package has vaulted Mr Meij to the top of the pile of highest-paid CEOs in the country.
But Domino’s generosity was not extended to its national workforce of drivers and delivery workers who were asked by the company’s franchisees to take pay cuts of up to $2 an hour last December.
On top of that, delivery staff have not been receiving penalty rates for shift work.
Mr Meij’s aggregate pay and benefits translated into a rate of $10,937 an hour compared to around $19 per hour for some delivery workers.
Although Domino’s made a net profit of $86.5 million in the 12 months to the end of June 2016, Mr Meij now earns more than CEOs at companies that produce profits that run into the billions.
He even gets more than perennial top earner Nicholas Moore at Macquarie Group.
While Mr Moore grossed around $18 million in 2016, he can at least defend his hefty pay on the grounds that his company generated a $2 billion profit.
Mr Meij’s pay package represents more than one-fifth of his company’s bottom line profit.
Most of his pay windfall was attributable to shares he received under company incentives schemes.
When shares and options entitlements were issued to him several years ago, the share price was trading at only $9.
Today, the value of those entitlements has risen sharply because the stock price is now greater than $76.
CEOs raking in mega pay from bonuses and share options
Performance bonuses and share entitlements are boosting the value of executive remuneration packages across the country, even though the fixed salary component of CEO pay is now at its lowest since 2008.
That is one of the key findings of a detailed analysis of 2015 CEO pay data by the Australian Council of Superannuation Investors (ACSI).
In a report published this week, ACSI found that the average fixed salary of chief executives at Australia’s 100 largest listed companies fell in 2015 by 3.3 per cent to $1.86 million.
But many CEOs are still able to garner lucrative pay packages because most are winning performance bonuses and big share entitlements.
ACSI chief executive Louise Davidson said the fall in fixed salaries demonstrated that company boards were moving to rein in the base pay of CEOs but that those savings were being offset by “strikingly persistent” bonuses.
“This begs the question – are bonuses really just fixed pay dressed up as at-risk pay?” she said.
“We really want to understand why it is that CEOs are receiving such a large proportion of their pay as bonuses.
“A bonus payment should require exceptional performance by the chief executive.”
Lowy family topped the executive pay rankings in 2015
While Mr Meij’s 2016 pay windfall makes him the highest-paid CEO in Australia this year, the ACSI study of 2015 remuneration packages found that Seek Ltd’s chief Andrew Bassat was the top earner last year.
After receiving bonuses and share entitlements, ACSI calculated that Mr Bassat realised total pay of $19.3 million last year.
Scentre Group boss Peter Allen had the next most lucrative pay package, after hauling in $17.8 million.
Macquarie’s Nicholas Moore received total pay and benefits worth $16.3 million – around $2 million less than this year.
The pay rankings were complicated slightly by the fact that Westfield Corporation’s joint chief executives – Peter and Steven Lowy – received combined pay of $24.75 million last year.
ACSI uses a “realised pay” measure to rank the incomes of CEOs.
This measure includes the real value flowing to CEOs of options and share schemes that are not captured by the statutory definition of executive pay in company remuneration reports.