Senior executives at some of Australia’s top listed companies received increased short-term incentives (STI), such as cash bonuses, in lieu of long-term incentives for performance, according to Mercer research.
Mercer’s ASX 200 Executive Remuneration Survey has found this (average) short-term incentive payment was 14 per cent higher than what was paid in 2008, the survey’s inaugural year.
At the same time, the survey found the average long-term incentive (LTI), including cash or share grants, was 11 per cent lower than in 2008.
Mercer head of executive remuneration Yolande Foord said STIs might have been favoured over longer-term rewards this year as companies focused on ensuring strong near-term performance and maintaining productivity.
“An increase in STIs may seem like a bitter pill for shareholders to swallow given market conditions over the past year, but this hides the fact that more than half of the same incumbents received a lower bonus than the previous year.
“It indicates that bonuses are only being awarded to those who are able to meet their performance targets and that companies are being disciplined in managing their performance programs,” she said.
