CEOs of Australia’s top 20 companies given nine times the pay rise of full-time workers

The incumbent chief executives of Australia's top 20 companies enjoyed a pay rise averaging 17.16% over the past year, more than nine times the average raise received by ordinary full-time workers, data compiled by Guardian Australia reveals.

The NAB CEO, Ross McEwan, received the biggest pay rise in percentage terms among the group, with the total value of his remuneration rocketing almost 130% from $2.31m to $5.29m.

Trevor Croker, the boss of poker machine maker Aristocrat Leisure, received the second-biggest bump, with his total pay packet swelling by 69%, from $4.46m to $7.53m.

The highest paid CEO at a top 20 company was Macquarie Group's Shemara Wikramanayake, whose pay packet increased by 48.5%, from almost $16m to $23.7m.

In the year to May, average earnings for full-time workers rose by just 1.9%, to $92,000 a year, meaning that unlike CEOs at the big end of town they took a pay cut in real terms because inflation over almost the same period reached 6.1%.

Even when including companies where the CEO changed, average remuneration across the top 20 still went up by an inflation-busting 9.2%.

Guardian Australia's data also reveals the vast gap between CEO pay at top 20 companies and the amount received by ordinary workers in the same industry.

Greg Goodman, CEO of real estate company Goodman Group, earned $15.8m, which is 186 times the average of $84,800 received by workers in the real estate sector, according to figures from the ABS. The difference was lowest in the mining sector, where seven CEOs were on an average of $4.9m, 34 times the $145,000 average earned by the industry's relatively well-paid workforce.

Economist Richard Denniss, the executive director of progressive thinktank the Australia Institute, said the government should introduce a 60% income tax on earnings above $1m a year to deal with "a small number of people that are receiving enormous benefits from incredibly profitable companies".

"If the companies want to hand away shareholders' money so freely, I can't see any economic or democratic reason why we shouldn't collect some of that back in the form of a new income tax threshold," he said.

He said the data showed that CEOs were applying a double standard when it came to their own earnings because they were not demonstrating the same productivity increases in their own work that they demand of ordinary workers in return for wage rises.

"Did CEOs work 17% smarter this year?" Dennis said. "Did they work 17% harder this year, and when they sat down with their boards, did they prove that they were 17% more productive?

"That is really important, because how does a librarian prove that they're more productive this year? How does the childcare worker prove that they're more productive this year?

"Of course it's impossibly difficult and their employers know that. But their employers, the CEOs, don't apply the same rules to their own remuneration. It's no accident."

He said that the reason CEO pay rose was because it was largely linked to company profits.

Across the top 20, profits after tax surged by an average 53% in the most recent reporting period, excluding companies that swung back into profit after making a loss, Guardian Australia data shows.

"So when the wage and salary earners work harder, and work smarter and get real wage reductions, then of course profits go up," Denniss said.

"And of course, the CEO salary goes up, but the CEO doesn't have to prove what they did. They've got a slice in the performance of the business - a slice that their employees are entitled to."

He said CEO pay also tends to ratchet upwards year after year because it is benchmarked against the pay of other chief executives.

"Australian CEOs are very highly paid by world standards, but we never hear that they are making themselves uncompetitive," he said.

He said other countries, particularly in Europe, were able to employ CEOs on far smaller multiples of average wages without economic problems.

"Now, it's true that companies in America pay even more," he said. "But, you know, that's not really an explanation for what we do in Australia."

To collate the data, Guardian Australia compiled statutory remuneration figures from the most recent financial reports of companies that are members of the ASX20 index, which is made up of the 20 biggest enterprises listed on the Australian stock exchange.

These statutory figures incorporate a valuation of non-cash remuneration such as options to buy shares.

Because end dates of financial years vary between companies, some of the wage figures, including Aristocrat's, are effective as of 30 September last year.

However, 11 of the 20 wage figures are effective as of the end of June this year.

At 18 of the companies, the CEO was the same person in both the most recent financial year and the previous one. The exceptions were Rio Tinto, where Jakob Stausholm took over from Jean-Sebastien Jaques, who left after the company blasted 46,000 year old rock shelters at Juukan Gorge in WA, and Woodside, where Meg O'Neil became the CEO after Peter Coleman retired.

Where companies used US dollars, as is common among miners, Guardian Australia converted the numbers to Australian dollars using either figures provided by the companies in their reports or the exchange rate on 8 September.

For comparisons of pay with workers in various industries, Guardian Australia used ABS data for May, and used full-time total weekly earnings. Inflation figures came from the ABS data for the year to June.