Australia CEOs More Likely to Get Bonus Amid 2008 Global Crisis

Sept. 29 (Bloomberg) -- Australia’s top chief executive officers were more likely to receive a bonus in 2008, when the stock market dropped by a record as the global financial crisis hit, the Australian Council of Superannuation Investors said.

A study of the pay received by 70 heads of S&P/ASX 100 Index companies in 2008 found that 93 percent got bonuses, up from 88 percent of those surveyed the year before, the group said. The average bonus fell to A$1.95 million ($1.7 million) from a record high A$2.18 million in 2007. Average total remuneration was A$5.15 million.

“The fact that more than 90 percent of CEOs received a bonus in 2008 begs the question just how boards decide whether or not to pay bonuses,” said Ann Byrne, chief executive officer of the Australian Council of Superannuation Investors. “It appears easier for a CEO to get fired than to receive no bonus.”

President Barack Obama and his Group of 20 counterparts have promised to “raise standards together” to ensure banks restrain pay on concern excessive executive remuneration helped create the first global recession in more than 70 years. U.K Chancellor of the Exchequer Alistair Darling yesterday called for an end to “automatic bank bonuses” after the collapse of the U.S. subprime market prompted banks to record $1.6 trillion in losses and writedowns.

The broader S&P/ASX 200 Index tumbled 41 percent in 2008, the biggest annual decline since the benchmark was set up in 1992. The S&P/ASX 100 slid 40 percent last year.

Former Macquarie Group Ltd. Chief Executive Officer Allan Moss received the biggest cash bonus in 2008 according to the ACSI’s study. Moss’s A$27.2 million bonus was more than three times larger than the second biggest bonus of A$7.6 million, received by Leighton Holdings Ltd.’s Wal King.

Australian Prime Minister Kevin Rudd said world leaders at the G-20 meeting he attended had agreed on a new approach to managing the world economy. The summit that ended on Sept. 25 represented a new chapter in the response to the global recession and “an unprecedented new experiment in global macroeconomic coordination,” Rudd said after the meeting in Pittsburgh.