The Federal Government's Productivity Commission has found that chief executives in Australia's listed IT industry are amongst the worst paid on paper compared to their peers in other sectors, while telco CEOs are paid among the best.
The report was commissioned following concern that
executive pay levels had gotten out of hand, with top-tier
employees taking large payouts when leaving companies, such as former
Macquarie Bank chief Alan Moss who departed from the finance giant in mid-2008 with a $50 million golden handshake.
The report, handed down this week, found executive remuneration
in general had grown strongly since the early 1990's, but the trends differed across sectors.
The average remuneration of a CEO
of an IT company within the top 300 companies listed on the Australian
Stock Exchange (ASX300) was $1.05 million, according to the
report, of which around half was base salary and half short- and long-term incentives.
That figure had grown a total of 51 per cent since the 2003-2004
Telco CEOs picked up significantly more — $3.09 million
on average, with two-thirds of that being incentive pay. The figure
had grown 64 per cent since 2003-2004.
The commission noted the data in some sectors could be driven by only a small
number of companies disclosing the amount they paid their CEO —
between one and three telcos in the period surveyed, for example.
At least one of those would be Telstra, which has historically paid
its CEOs more than rivals due to its increased size.
Previous Telstra chief executive Sol Trujillo picked up
around $43 million for his four years with the telco, and current
leader David Thodey will pocket at least $2 million a year,
although that could rise by several hundred per cent if he meets
When it came to non-CEO executive remuneration, IT staffers
picked up an average of $501,000 in the 2008-09 year, a figure that
had risen 16 per cent over the prior five years, while telco execs not in the CEO spot
earned an average of $1.79 million, up 53 per cent.
The highest-paid IT executives in Australia are likely to be the
leaders of the local divisions of international technology giants
like IBM, Microsoft and Oracle, but there is no requirement for
such executives to publicly disclose their earnings as they are not
listed for local trading.
However, of those that are listed, mid-tier IT services
companies like ASG, UXC, Oakton and SMS Management & Technology
are among those that pay their CEOs the most, with total
remuneration often breaching $1 million.
Top-tier chief information officers also regularly earn top
dollars; for example, the IT chiefs of Australia's largest banks
typically pick up $2 million or more, including incentives.