Australian CEOs get double the pay for quitting

27 November 2008

Big jobs net big salaries, but being forced out of the company nets even bigger payouts for Australian CEOs in line with the trend in the US, in spite of the global liquidity crunch, shrinking markets and the wholesale collapse of shareholders wealth, the growth in executive pay and golden handshake looks unstoppable.

While ordinary Australians worry about retaining their jobs, the top guns in corporate Australia are having a smooth sailing even while being terminated from the company with the average chief executive in Australia's top 100 firms laughing all the way to the bank with $3.4 million, or two years' pay, as per research conducted by corporate governance advisor RiskMetrics.

The $3.4 million in average termination payments last year given to Australia's chief executives works out to 200 per cent of their annual salary and, in the past three years, a combined $112 million was given away by one third of top 100 firms in CEO severance packages.

PBL's John Alexander and the stock exchange's Tony D'Aloisio were paid a combined whopping $22.7 million in termination payments while out of 33 who left the top 100 firms, only 5 company heads left without any payments, and two out of three left with more than $1 million despite 12 of them retiring.

Oz Minerals and Tatts were the only two companies that sought approval for the termination payments to their executives prior to them leaving, from their shareholders.

OZ Minerals CEO, Owen Hegarty was paid $8.35 million while leaving even when shareholders at an AGM in July rejected a proposal to pay $10.67 million.