Pay gap turns CEOs into poaching targets

By JULIE MIDDLETON

The pay gap between New Zealand and Australian chief executives is widening, says a new pay survey - raising the prospect of greater Kiwi-poaching.

New Zealand company heads received fixed remuneration packages worth 46 per cent less than their Australian counterparts, according to the Sheffield 2003 CEO Survey.

In 2000's survey, Australian chiefs of companies with revenue of less than $200 million were getting 40 per cent more than their New Zealand counterparts.

Sheffield head Ian Taylor said the gap "increased to 43 per cent in 2001, and the latest survey puts the gap at 46 per cent", he said.

The widening gap was "cause for real concern, especially as New Zealand directly competes for chief executive talent with Australia", he said. New Zealand chief executives were still among the poorest-paid in the Organisation for Economic Cooperation and Development.

The lure of New Zealand's lifestyle wasn't enough on its own to keep top performers in the country, Taylor said.

The survey covered 511 managing directors, chief executives and general managers in New Zealand and Australia over a three-year period.

It revealed a second yawning gap, in the proportion of executives' pay put at risk to create greater incentives to perform.

In Australia, 46 per cent of a CEO's package is at risk and likely to be lost if certain agreed goals were not met. In the United Kingdom, it is 31 per cent.

In New Zealand that figure was only 16 per cent, said Steve Richardson, Sheffield's head of reward and technology consulting.

"There's no incentive for those good CEOs to perform."

The survey also found that the total pay packages received by this year's sample of company heads ranged from $162,813 to $314,058 with a median of about $215,000.

The median increase in base salary during 2002 was 4.8 per cent, ahead of the Consumer Price Index of 2.7 per cent for the year ending December 2002.