ASX 200 chief executive pay rises 9.8% to AUD $5.2m

Diligent reported that median granted pay for ASX 200 chief executives rose 9.8% to AUD $5.2 million in 2025. Its data also showed realised CEO pay increased 10.6% across the index.

The figures point to continued growth in executive remuneration at listed Australian companies, as boards face scrutiny over how those packages are structured.

Across the ASX 300, median granted CEO pay rose 4.8% to AUD $4.2 million, while realised pay jumped 23%. The data also showed a growing share of remuneration being directed to long-term incentives rather than fixed salary.

Long-term incentives accounted for 45% of median granted CEO pay in the ASX 200 in 2025, up from 42% in 2024 and 39% in 2023. Median granted long-term incentive pay reached AUD $2.1 million, up from AUD $1.8 million a year earlier and AUD $1.4 million two years earlier.

Base pay represented 33% of median granted CEO remuneration at ASX 200 companies in 2025, a smaller share of the overall package than in previous years, as boards placed more weight on longer-term reward structures.

Andrew Amos, Vice President, APAC, Diligent, said the shift had become a central governance issue for boards.

"Executive remuneration is becoming an increasingly important governance issue for Australian boards as they navigate global competition for senior executive talent," Amos said.

"The data shows CEO pay continuing to rise, but the bigger shift is in how executives are being rewarded, with greater emphasis on long-term incentives and performance. For boards, the challenge is ensuring pay remains clearly aligned with strategy, shareholder interests and long-term value," he added.

Regulatory pressure

Australia's executive pay system remains shaped by rules that affect how remuneration is designed, disclosed and approved. Those settings differ from some other large markets and can influence how attractive local pay structures appear to internationally mobile executives.

One feature is the so-called two-strikes rule, under which a board spill vote can be triggered if a company's remuneration report attracts more than 25% opposition at two consecutive annual meetings. In financial services, APRA's CPS 511 standard requires significant financial institutions to defer at least 40% of variable remuneration for certain senior executives and 60% for chief executives over four to six years.

APRA also updated its CPG 511 remuneration guidance in May 2026, reinforcing the expectation that executive pay should encourage responsible risk-taking and include consequences for poor risk outcomes. Together, these settings have fed a broader debate over whether Australian companies can match overseas rivals when recruiting senior leaders.

Michael Robinson, Principal, Guerdon Associates, addressed that issue in the report.

"When you compare pay practices to other markets, Australia is somewhat behind, or at least isolated from, major global trends," Robinson said in the Executive Compensation Report.

"That's made Australian pay less competitive globally, which is a real constraint when you're competing for talent."

He pointed in particular to financial services, where remuneration settings in Australia can compare unfavourably with those in the UK. Longer deferral periods and tighter regulation may weigh on the appeal of Australian roles at a time when pay elsewhere has risen and some restrictions have eased.

Investor backing

Despite higher headline pay levels, investor support for remuneration reports at large Australian listed companies remained steady. Average support for advisory remuneration votes at ASX 200 companies was 90.6% in 2025.

That suggests most investors continue to back board decisions on executive pay, even as scrutiny persists over disclosure, performance hurdles and the balance between fixed and variable rewards. It also indicates that concerns over rising pay have not translated into widespread revolts at annual meetings.

Amos said boards would need to manage the tension between external competition and domestic expectations.

"As executive pay evolves, boards will need to balance global competitiveness with the expectations of Australian investors. The key will be ensuring remuneration decisions are transparent, defensible and clearly justified," he said.