How the performance of Australia’s highest-paid ASX 200 CEOs stacks up

The 2023 financial year saw a record number of board strikes against CEO remuneration, with 41 instances recorded, according to the latest data compiled by the Australian Council of Superannuation Investors. But at the same time, the rate at which bonuses were awarded to the leaders of some of the largest listed companies continued to climb.

In the ASX 100, only two CEOs didn’t take home a bonus in FY23. Among this cohort, CEOs received a median bonus of 66.3% of their maximum potential.

“Bonuses should not become a given in Australian companies. At a time when companies are focused on productivity and performance, it is critical that bonuses are only paid for exceptional outcomes," said Ed John, Executive Manager, Stewardship at ACSI.

“While overall pay levels have dropped, investors and boards must not become complacent. The numbers show that we could see a breakout in CEO pay levels in the future. It will be critical that boards pay close attention and ensure performance hurdles are set at the right levels,” Mr John said.

ACSI makes the point that investors should be concerned in instances where bonuses are awarded even when underlying company performance doesn’t stack up.

Which ASX 200 CEOs topped the pay scale?

ACSI distinguishes its list between Australian-based and offshore companies. Overall, ResMed’s US-based CEO Mick Farrell was the highest-paid CEO, pocketing a cool $47.5 million in total remuneration. This was closely followed by News Corp’s Robert Thomson on $41.5 million.

Among locally-based firms, Goodman Group’s Greg Goodman took home $27.3 million in FY23.

To get a sense of how these remuneration figures stack up against company performance, let’s take a look at a couple of other measures. We’ve featured MarketMeter data a few times in recent years, and it provides an interesting reference point here, too. MarketMeter collects data across 28 categories, including Execution of Strategy, Credibility, Clarity of Strategy and Earnings Quality.

MarketMeter also measures the Effectiveness of CEOs, which is what we’re looking at here. Among the companies that employed the top 10 earners outlined above, five of them made the cut: Goodman Group, Macquarie, BHP, Commonwealth Bank and Wesfarmers. 

MarketMeter collects data from approximately 140 institutions, a number which includes many of the fund managers that regularly feature on Livewire.

It’s also interesting to look at how the companies have performed in the past 12 months. In the following, we provide a 12-month snapshot of the five companies that paid their CEOs the biggest bucks.

ResMed (ASX: RMD)

The top-paid CEO helmed a company that saw its share price dip by a little over 5% in the past 12 months.

What the brokers think

• Market Index Broker Consensus: BUY (2 Buy, 2 Hold, 0 Sell)
• CLSA upgraded RMD to BUY from Outperform on 26 June, with a price target of $34.40.
• Citi downgraded the stock to NEUTRAL from Buy on 25 June, with a price target of $30.

News Corporation (ASX: NWS)

News Corp shares are up 40% in the past 12 months.

What the brokers think

• Market Index Broker Consensus: STRONG BUY (3 Buy, 0 Hold, 0 Sell)
• Macquarie rates News Corp as OUTPERFORM as of 9 February.
• Morgan Stanley rated NWS as OVERWEIGHT back in August 2023.

Goodman Group (ASX: GMG)

It’s been a good year for the commercial property firm, as its big exposure to data centres linked with the red-hot AI theme driving profits higher. GMG’s share price is up 79% over 12 months.

What the brokers think

• Market Index Broker Consensus: BUY (3 Buy, 0 Hold, 1 Sell)
• UBS downgraded GMG to SELL from Neutral on 5 July, but lifted its price target to $31.71.
• Jarden also downgraded the company on 19 June, to OVERWEIGHT from Buy with a price target $37.60 as of 22 April.

Macquarie Group (ASX: MQG)

The ASX’s other big bank, Macquarie shares rose almost 15% in the 12 months to 18 July.

What the brokers think

• Market Index Broker Consensus: BUY (3 Buy, 2 Hold, 1 Sell)
• CLSA downgraded MQG to HOLD from Outperform on 9 July, but lifted its price target to $201.
• Citi downgraded the stock to SELL from Neutral on 8 April, with a price target of $161.

BHP Group (ASX: BHP)

The Big Australian’s share price is off 4.5% in the past 12 months.

What the brokers think

• Market Index Broker Consensus: BUY (2 Buy, 2 Hold, 0 Sell)
• Goldman Sachs rates BHP as NEUTRAL as of 6 June, with a $49 price target.
• Citi resumed its BUY rating on 3 June, with a price target of $44.51.