It's still tough for financial services execs at the top
Executive salaries are maintaining their stratospheric heights, writes Milana Pokrajac.
Chief executive officers (CEOs) and the salaries they earn have often been the subject of public and media scrutiny — not to mention envy — as details of their earnings become common knowledge.
The CEOs of the four major banks receive on average around $8.3 million a year, with ANZ’s Michael Smith getting close to $11 million a year.
To put that into perspective, a financial planner in Sydney usually receives a $75,000 annual package and a portfolio manager in Melbourne gets $200,000 at best.
Bob Olivier from Advantage Professional says people are always scathing and critical of what they feel is excessive pay for those in senior positions.
“We believe that the market should and will always determine price.”
Commenting on Smith’s $11 million salary, the director of Robert Walters’ office in Melbourne, Chris Kidd, said he believes it comes down to value creation and growth.
“Smith has hit deliverables that were set for him and ANZ has had a good couple of years under his leadership. They’ve had a very large global push and already have a strong presence in Asia, so that may have been highly incentivised,” Kidd said.
Kidd also highlighted that executives now have more power to negotiate their salaries than they had 18 months ago.
“We’ve seen a return of confidence in the market, the worst is behind us and businesses don’t want to fall behind their competitors. They want to retain their good people, so CEOs have the power to demand more.”
Due to recent market recovery, executive pay increased by 10-15 per cent since last year, especially at the general manager and CEO levels, according to Robert Walters. Senior regional director of Hays Banking Jane McNeill believes executive salaries will continue to see an increase in the future.
“With activity at the executive level starting to rise in the market, the first cases of modest salary increases are starting to take place and will be seen over the remainder of the year,” McNeill says.
Hays Banking also expects bonuses and incentives to be reflective of the improved economic conditions. However, Kidd takes a different view.
“I believe bonuses get more negativity in the press than salaries themselves and they always catch the eye of the public. In my opinion, this is why salaries are more likely to edge up at the expense of bonuses.”
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