Executives at some of Australia’s biggest companies recorded high double-digit pay rises over the past year, according to a new report, more than double the rate of inflation.
The release of the Governance Institute of Australia’s board and executive remuneration survey comes amid a debate over the impact of wages on inflation, which has largely focused on lower-paid workers receiving smaller increases.
Managing director base salaries across listed companies increased an average of 14% this financial year, while chief executive salaries rose by 15%, the report found.
Australia’s headline inflation rate rose to 6.8% in April, with housing and food costs the main driver.
Those in charge of Australia’s 200 largest listed companies received an average fixed salary of $1.58m. Many also qualified for performance bonuses that can often double their pay packet.
Governance Institute chief executive, Megan Motto, said the pay rises showed there was strong competition for business leaders.
“These are significant increases off the back of several years of relatively small rises in fixed pay for executives,” Motto said.
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The Governance Institute report, produced by McGuirk Management Consultants, surveyed 226 listed companies as part of its wider research on more than 1,100 boards across the public, private and not-for-profit sectors.
The high executive pay rates rub against the more modest rises recorded across the broader workforce.
Australians are seeing their wages rise at an annual rate of 3.7%, representing a quickening pace but far less than cost-of-living increases. This means most employee pay packets are shrinking, relative to what they can buy.
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Housing costs are rising by almost 9% a year, while food prices are up by about 8%, according to the most recent inflation data.
The Reserve Bank governor Philip Lowe has warned against the idea that all workers should be compensated for inflation, arguing it could trigger another spike in inflation.
Last week, the RBA lifted interest rates for a 12th time in just over a year to 4.1%.
While rate rises are designed to subdue demand, and put pressure on prices, there is also evidence that important sectors, including supermarkets, are taking advantage of economic conditions to increase their profit margins.