Fund pressure forces CEO pay to stay domestic

CEO pay in Australia’s largest listed firms has risen modestly, but remains below the levels seen in 2012, according to a new report from the Australian Council of Superannuation Investors.

Investor pressure keeps fixed salaries in check

The study tracks executive compensation for the ASX 100 and ASX 200 groups over 24 years. It notes that superannuation funds and other institutional investors, who collectively manage more than $2.2 trillion, have been actively engaging boards to curb salary growth that mirrors overseas spikes.

For the current financial year, the median fixed pay for an ASX 100 chief executive rose 4 percent to $1.83 million. That amount is still lower than the $1.95 million median recorded in 2012 when many CEOs earned their highest base salaries.

Ed John, ACSI’s executive manager for stewardship, said the restraint reflects “the diligence of Australian investors and boards” rather than market forces alone. He added that when CEOs appear on the highest‑paid lists, their firms have typically delivered strong long‑term performance.

Investor oversight remains key.

Top earners still pull in huge sums

Life360’s Chris Hulls topped the FY25 rankings with a reported total compensation of $47.7 million. He was followed by ResMed’s Mick Farrell at $35.1 million and News Corp’s Robert Thomson with $33.5 million.

Among Australian‑based executives, Sigma Healthcare’s Vikesh Ramsunder earned $32.6 million after the company merged with Chemist Warehouse, marking his first entry among the nation’s top earners.

Performance incentives remain a core component of pay packages. The median ASX 100 chief executive collected 70.7 percent of their maximum bonus opportunity in FY25, a range that has consistently hovered between 60 percent and 77 percent over the past decade, except for the first year of the COVID‑19 pandemic.

Only five eligible CEOs received no bonus, while ten executives left their roles, indicating that departures are more common than missing out on incentive payouts.

These bonus outcomes, combined with higher realised pay, pushed the median total remuneration for an ASX 100 chief executive to a record $4.8 million, a 15.6 percent increase from the previous year.

Much of the uplift stemmed from long‑term equity incentives vesting after periods of strong share‑price performance, rather than from sizable hikes in fixed salaries.

John warned that investors cannot assume Australia’s remuneration framework will stay insulated from overseas trends. He cautioned that “CEO bonuses continue to be a ‘given’ in Australia’s largest companies,” and that vigilance is needed to prevent a salary “break‑out” similar to that observed in the United States.

Termination payments to departing ASX 100 CEOs reached $18.6 million in FY25, after nine executives received payouts, up from six the year before.

Despite the rise in total compensation, the gap between chief‑executive pay and average Australian earnings has not widened. The median ASX 100 CEO now earns roughly 55 times the salary of an average full‑time adult worker, a ratio that sits below the peak seen earlier in the decade.