Golden parachutes deflate rapidly for some, not all ASX chiefs

Termination payments for chief executives of the largest ASX-listed firms decreased significantly in FY24, hitting the lowest levels in 15 years. However, in the same period, those at companies outside of the ASX 100 rose considerably.

Research by the Australian Council of Superannuation Investors (ACSI) shows the golden parachute payments to ASX 100 chief executives totalled just $8.38 million in FY24. This is down from $33.52 million the previous year.

It's the lowest level seen since FY10 when termination payments came in at just $5.70 million.

While this was largely the result of just six terminations occurring compared to the prior year's 17, the average individual payment fell sharply from $1.97 million to $1.4 million. However, in FY22 there was also just six terminations, and the total paid then was $14.56 million, indicating a trend towards lower termination payments regardless.

The largest was paid to Fiona Hick, who served as chief executive of Fortescue for just six months and received $2.07 million.

"Together, Australian investors and boards have used the changes to termination payments laws in 2009 to drive down the cost of chief executive departures," ACSI executive manager - stewardship John Ed noted

"Those changes have driven better accountability and avoided 'golden parachutes' which provide pay for failure to departing chief executives.

"This was a major issue in Australia, and we saw more than $80 million of shareholders money paid to terminated chief executives in the year before the law changed."

However, at the same time the termination payments for chief executives in the ASX 101-200 cohort increased significantly in FY24. In total, $23.11 million was paid out to 14 executives - the highest amount paid and largest number of terminations since FY11.

The largest payment went to former Red 5 chief executive Mark Williams, who received $4.36 million.