Keeping CEO salaries in check

ASX-listed companies must present a remuneration report, containing details of the salary packages of its executives and directors, at the company's AGM. Essentially, CEO salaries represent a return on investment for shareholders and remuneration voting is a powerful tool to utilise.

According to a report by the Australian Council of Superannuation Investors, average realised pay for ASX200 executives reached an astonishing $9.14 million last financial year – about 132 times the average worker’s wage - and the average bonus paid to ASX100 chief executives also hit a new high at $2.31m.

Some investors may only care about executive pay when returns are below average but it is becoming increasingly important for boards to assess CEO performance on broader metrics than just financial measures. This could include meeting ESG-related indicators and there's little doubt that company employees looking at these salaries will feel that those pay outcomes are fair from their perspective.

ACCR’s Executive Director, Brynn O’Brien says when the gap between CEO pay and workers' wages widens, it exacerbates inequality. She says executive pay should be sensitive to social expectations and concerns and that some recalibration will be necessary.

Watch her full interview with ABC News.