Slowdown for executive pay rises

The growth rate of executive pay in Australia and New Zealand has halved this year, a survey suggests.

Management consulting firm Hay Group surveyed 54 of the top 100 companies in the two countries and found that remuneration for chief executives, including fixed pay and incentives, grew 9.4 per cent this year compared with 18.5 per cent last year.

Senior executive salary packages grew by 8.9 per cent, compared with 16.4 per cent last year.

The results show businesses are becoming serious about the link between company performance and executive pay, said Kim Neuhold, a senior consultant of Hay Group's executive remuneration operations.

"For many corporations 2002 has been a tough year, so as corporate performance eased off so did the upward spiral in remuneration."



Executives in financial services got the highest increase - 16.2 per cent on average - and those in service companies such as telcos, health or transport businesses got the lowest - 0.6 per cent on average.

Neuhold said this reflected how financial-sector firms had performed on a share price basis in the past year, while telcos had taken a bath.

On average, CEOs received 76 per cent of their incentive-based payments compared to 100 per cent last year. Fixed salaries rose about 7 per cent, compared to 8.5 per cent last year.

- NZPA