Analysis of the top 100 Australian companies by market capitalisation at 31 December 2014 has shown that over half of the CEOs received at least their target STI payment for the 2014 year.
Not all companies disclose their target and maximum opportunity for short term incentives and some disclose target payments amount that are equal to the maximum award possible under their bonus arrangements.
Of the 100 companies, 70 disclosed the target STI opportunity for the 2014 year as a percentage of total fixed remuneration and 86 disclosed the maximum STI opportunity.
The distributions of target and maximum opportunity for these samples were as follows:
For the median company, target STI opportunity was approximately equal to fixed remuneration.
The percentage of the target and maximum actually awarded for the CEOs of these companies was as follows:
Of the companies that disclosed the target opportunity as a proportion of fixed remuneration, half paid their CEO at target level. Of those companies that disclosed maximum STI opportunity as a proportion of fixed remuneration, half paid almost 75% of the maximum payment.
A small number of companies were excluded from the above distributions because they were undergoing a structural transition and their remuneration was unable to be separated into portions related to the entity post and prior to restructure.
Disregarding whether the target and maximum opportunity was disclosed, the distribution of STI paid as a percentage of fixed remuneration was as follows (with a sample size of 96):
This appears to show that companies that do not disclose target or maximum STI opportunities as a proportion of fixed remuneration paid their CEOs lower bonuses during the 2014 year than those that did.