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Executive pay continues to climb, but bonuses scarce

In the post-Occupy and GFC age, the spotlight is, more than ever, being directed toward executive pay packets. And two surveys published today by remuneration consultancy Strategic Pay paint a picture of rising executive base pay and shrinking incentives in New Zealand.

In the post-Occupy and GFC age, the spotlight is, more than ever, being directed toward executive pay packets. And two surveys published today by remuneration consultancy Strategic Pay paint a picture of rising executive base pay and shrinking incentives in New Zealand.

The CEO and Top Executives survey and Directors' Fees survey were created by the amalgamation of Strategic Pay Limited and Moyle Consulting’s reports for the first time.

Although base salaries for CEOs and chairperson fees are on the rise, and in some cases significantly, non-executive directors’ fees have shrunk over the past year.

“New Zealanders - like the Australian, American and UK public – want to see closer links between pay and performance, particularly given the tough economic conditions. Boards must continue to be mindful of public sensitivities and investor concerns," said Strategic Pay managing director John McGill.

The CEO and Top Executives survey found that median base salaries for CEOs/MDs are up nearly 10 percent to $315,000, although median total remuneration increased by only 2.3 percent to $535,000.

Incentives and bonuses shrunk by over half, however, to $65,664, or 12 percent of average base salaries.

The gap between private sector CEO/MD base salaries and those of their public sector peers has shrunk over the past 12 months to 0.5 percent, down from 8 percent.

The heads of larger organisations enjoyed increases in their median packages of 3.6 percent at base salary and 2.7 percent for total remuneration, compared with 5.6 percent and 8.2 percent in smaller companies.

Meanwhile, the New Zealand Directors’ Fees Survey report highlighted that chairs of publicly listed companies are paid a median 36 percent more than those in the private sector.

The median base annual fee for a non-executive director fell 4 percent to $33,600 and for a non-executive chair, $65,000, up from $62,606 in 2011.

The highest fees were paid to non-executive chairs within the manufacturing industry, consistent with last year. They were nearly four times larger than the lowest fees found within the education industry.