Many chief executive officers (CEOs), board directors, and senior managers had their salaries frozen during the 12 months that the COVID-19 pandemic impacted Australia's economy, according to a new national report.

The Aon and Governance Institute of Australia Board and Executive Remuneration Report 2021 revealed that only 25% of CEOs received increases in fixed remuneration in the last 12 months, down from 53% in the previous year. Those who received a pay rise reported only a 1.4% increase, still down from 2% in the previous year.

The respondents also stated that bonuses were harder to secure – with the number of ASX300 receiving some form of short-term incentive in the last 12 months dropping from 74% to 64%.

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Governance Institute of Australia CEO Megan Motto said the report includes insights into the state of the economy.

“Australia is currently in a period of low wages growth, and it's clear senior executives and board directors are not immune from this,” Motto said. “Across the board, we are not seeing many – if any – meaningful salary increases.”

This year, 21% of companies provided salary increases to non-executive directors compared to 28% in the previous year.

In the past year, the most dramatic fee increases were for members of the audit or risk committee. This year, boards increased their median fee by around 5% for the chair and 4% for members. Around one-third of senior executives also received increases in fixed remuneration, with a 1.9% average increase for those executives.

Dawson Wang, the principal for rewards solutions at Aon, commented: “The data suggests that within the ASX300 and the surveyed participants, the remuneration environment for both executives and non-executive directors can be best described as stagnant.

“It seems that uncertainty driven by COVID-19 at the beginning of the 2020-2021 financial year led many companies to hold salaries at current levels or defer the timing of the increase. It will be interesting to see the flow-on effect and impact on executive movement as the economy continues to rise above pre-pandemic levels and confidence returns.”