Newly appointed chief executives in WA are on substantially lower salary packages compared with recent years, a Business News survey has found.
![](https://static.businessnews.com.au/sites/all/themes/bn2020/images/squares.gif)
![Sharp fall in CEO salaries](https://static.businessnews.com.au/sites/default/files/styles/medium_906x604/public/articles-2017-04/Leigh-Junk-B.jpg-1440.jpg?itok=yr3tMjCr)
Newly appointed chief executives in WA are on substantially lower salary packages compared with recent years, a Business News survey has found.
The median salary for newly appointed chief executives in Western Australia has fallen to $250,000 per annum, down from $295,000 last year and more than $320,000 the year before that.
The latest figure is based on a survey of 36 chief executives who are either newly appointed or whose companies have listed on the ASX over the past four months.
The fall in median salary has been surpassed by the drop in average salary, down to $288,000 from $376,000 last year.
The latest survey sample features a very broad salary range, from as little as $120,000 to as high as $669,000 (see table).
It also shows a very loose correlation between chief executive salary levels and market capitalisation, with companies such as iCollege, Quantify Technology and Battery Minerals paying high salaries relative to their market value.
Atlas Iron’s new boss, Cliff Lawrenson, topped the survey sample with a total salary of $669,790, inclusive of superannuation.
New Doray Minerals boss Leigh Junk was next with a base salary of $500,000 (plus superannuation).
That’s a small increase from the $475,000 paid to his predecessor, Allan Kelly.
David Flanagan will be paid a total of $465,000 per annum, inclusive of superannuation and fringe benefits, in his new job as executive chairman of graphite play Battery Minerals.
Internet of things startup Quantify Technology, which listed on the ASX last month after completing a $5 million IPO, pays more than most of its peers.
Managing director Mark Lapins is paid a base salary of $365,000 per annum (excluding superannuation).
In addition, Mr Lapins is paid a director’s fee of $4,000 per month, a highly unusual arrangement as most other managing directors are simply paid a salary without a separate director’s fee.
Quantify has a similar set-up for executive chairman Aidan Montague – he is paid a base salary of $260,000 (excluding super) plus director’s fees of $4,000 per month.
Mr Lapins’ package puts him well above the top executives at other tech-focused listings.
Ausnet Financial Services’ Paul Niardone has a base salary of $300,000, as does ServTech Global’s Brett Quinn.
Cycliq managing director Andrew Hagen is paid $250,000 per annum, while Auscann Group Holdings’ Elaine Darby and Skin Elements’ Peter Malone are both paid $200,000.
Ms Darby looks like particularly good value for money, given her salary level relative to the company’s market value.
New Draig Resources chief Steve Parsons sits near the bottom of the survey, with a modest base salary of $150,000 (inclusive of superannuation).
That’s a big change from his last job at Gryphon Minerals, where he was on a base salary of $500,000, though Mr Parsons had voluntarily agreed to be paid $360,000 a year.
Like most chief executives at junior miners, the big upside for Mr Parsons comes from equity incentives.
He has been awarded 15 million share options with an exercise price of 3.5 cents, and a further 15 million with an exercise price of 4 cents.
That’s just above the 3 cents per share price at which Mr Parsons and other investors contributed to a $500,000 placement last month.
The pricing of share options is highly variable.
Mr Flanagan, for instance, is due to get 10 million options with an exercise price 150 per cent of the volume weighted average price (VWAP) of the shares for the five days prior to the options being approved.
Primary Gold’s Garry Mills has an easier task, as he is due to get 10 million options with an exercise price 130 per cent of the VWAP.
Reward Minerals boss Gary Lethridge is due to get 4 million options across three tranches, with the most challenging having an exercise price 220 per cent of the VWAP.
Peninsula Mines illustrated how much value companies attribute to a board seat.
The company appointed Jon Dugdale as chief executive last August and promoted him to managing director in February.
In return for the extra responsibilities, his salary has been increased to $216,000 (including superannuation) from $144,000.
Dragon Mining shows that the published base salary of top executive is not always a reliable guide to their remuneration.
In January, Dragon announced it was cutting the base salary of executive director Brett Smith to $300,000.
His base salary last year was $400,000, but after adding in superannuation and an annual bonus his total income was nearly $668,000, so it remains to be seen how far his income will fall this year.
Strike Energy, which has just implemented a major board restructure, illustrates how many companies have cut back their salary levels.
The restructure included Perth-based John Poynton becoming chairman, local mining investor Tim Goyder becoming a non-executive director and Shell executive Stuart Nicholls being recruited as managing director.
Mr Nicholls will be paid an annual salary of $300,000 (inclusive of superannuation), well below the $470,850 paid to his predecessor, David Baker, who only took on the role in September of last year. As part of the new appointments, the three new directors have all been granted share options, but with different exercise prices.
The share options granted to Messrs Poynton and Goyder have an exercise price of 15 cents, while the options granted to Mr Nicholls have an exercise price of 12 cents.