2018 Super Fund Salary Survey

PERFORMANCE-BASED REMUNERATION, long the norm across the highly paid for-profit funds sector, is now also commonplace in the non-profit funds sector. And there’s no magic formula FOR HOW TO MAKE IT PAY OFF FOR MEMBERS.

 

As the superannuation sector continues to grow in size and complexity, funds are increasingly looking to attract and retain top-performing executives from banking and funds management.

Accordingly, more non-profit funds are now offering top executives remuneration packages that incorporate incentives. This strategy is not without controversy and funds are under pressure to prove the remuneration structures they use do, in fact, help them employ the best talent and produce the best outcomes for their members.

The 2018 Investment Magazine Super Fund Salary Survey confirms that at least 20 of the 50 largest non-profit funds offer a bonus scheme to their chief executive, while at least 22 of the 50 largest funds have a bonus scheme for the chief investment officer.

We use the qualifier “at least” because the survey includes a number of government funds that do not disclose whether bonuses are applicable.

The Investment Magazine Super Fund Salary Survey is now in its fourth year. It reflects remuneration information for the financial year ended June 30, 2017. The survey includes the 44 largest nonprofit licensed super funds, based on Australian Prudential Regulation Authority data for the period, and the country’s six largest government pension funds.

The survey does not include bank-owned or other for-profit super funds because the regulator does not require them to disclose comparable data.

The Future Fund’s David Neal topped the list of highest-paid CEOs in the survey, earning $1.26 million, while the highestpaid CIO was UniSuper’s John Pearce, on $1.43 million. The most handsomely paid chair in the sector was again TWUSUPER’s David Galbally, on $277,200.

Top 5 earners

The highest-paid CHIEF INVESTMENT OFFICERS

FUND FUM ($b) CIO TOTAL REM ($)
1 UniSuper 62 John Pearce 1,433,738
2 AustralianSuper 119 Mark Delaney 1,430,730
3 Commonwealth
Superannuation
Corporation
38 Alison Tarditi 1,214,478
4 Future Fund 134 Raphael Arndt 1,144,375
5 QSuper 94 Brad Holzberger 944,439

Click here to view the full table of the CIO pay at the 50 biggest super funds

The highest paid CHIEF EXECUTIVES

FUND FUM ($b) CEO TOTAL REM ($)
1 Future Fund 134 David Neal 1,256,011
2

Local Government

Super

11 Peter Lambert 1,120,396
3 VFMC 56 Lisa Gray 950,000-959,999
4 QSuper 94 Michael Pennisi 985,273
5 Sunsuper 45 Scott Hartley 938,992

Click here to view the full table of the CEO pay at the 50 biggest super funds

The highest-paid CHAIRS

FUND FUM ($b) CHAIR TOTAL REM ($)
1 TWUSUPER 5 David Galbally 277,200
2 TelstraSuper 20 David Leggo 266,097
3 UniSuper 62 Christopher Cuffe 222,200
4 Future Fund 134 Peter Costello 206,330
5 REST Industry Super 45 Kenneth Marshman 203,000

Click here to view the full table of the chair pay at the 50 biggest super funds

CIO BONUSES THE NORM

As the individuals responsible for investment performance, CIOs are routinely the best-paid employees within super funds.

The 2018 Super Fund Salary Survey showed UniSuper CIO Pearce was not only the highest-paid employee of his fund, but also the highest earner in the survey, making $1,433,738. His remuneration reflects the myriad complexities of running a combination of defined benefit and defined contribution funds, and managing more than half of the $61.6 billion fund’s assets internally.

In 2016-17, UniSuper changed the variable component of its CIO’s total available remuneration (TAR), increasing his maximum potential bonus from 100 per cent to 120 per cent of his base pay. Pearce’s base salary of $589,480 was augmented by a $724,517 short-term incentive payment, superannuation contributions of just over $100,000 and a long-service leave payment of $19,529.

AustralianSuper CIO Mark Delaney’s take-home pay was just shy of Pearce’s, at $1,430,780, after his base of $680,890 was supplemented with a performance-based variable component of $714,890, and superannuation contributions of $35,000. AustralianSuper is building its internal investment team and already manages roughly $28 billion of its total assets internally.

It is notable that the two highest-paid CIOs run big and growing internal teams that save members many millions of dollars in external fee payments each year.

MORE AT RISK

UniSuper executive manager of people and member services, Lee Scales, says key executives should have some remuneration at risk, linked to fund performance, to align them with members’ interests; however, she says some funds “continue to have no ‘at-risk’ component, but appear to be paying their executives at similar levels to those with an ‘at-risk’ component”. “This means there’s no scope to move the dial on salary commitment for performance variation,” Scales says. “We believe having a portion of our executives’ remuneration that is variable and aligned to fund performance is more appropriate than having their entire compensation package fixed, and therefore not responsive to performance that benefits members.”

The third highest-paid CIO came from the $38 billion default fund for federal public servants. Commonwealth Superannuation Corporation (CSC) rewarded CIO Alison Tarditi with total remuneration of $1,214,478. Tarditi’s base salary of $624,741 was supplemented by $556,389 of short-term cash profit-sharing and other bonuses, plus benefits including superannuation.

Future Fund CIO Raphael Arndt’s base salary of $568,421 was pumped up with a $556,334 payment under the Future Fund’s performance-related payment (PRP) plan, which incorporates assessments of both an individual’s personal performance and investment performance.

Up to 70 per cent of Arndt’s potential performance pay is tied to the fund meeting its aim of a return of at least Consumer Price Index (CPI) plus 4.5 per cent over rolling three-year periods.

At QSuper, CIO Brad Holzberger’s short-term cash incentive payment represented about 72 per cent of total variable remuneration available to him, which the fund’s remuneration report states is assessed against “long-term absolute investment return targets and thresholds which are set by the board within approved risk tolerances”.

Holzberger’s $994,439 total remuneration ranked him fifth among fund CIOs. His total remuneration comprised base pay of $504,141, a short-term cash incentive of $442,048, and other benefits, including superannuation and long-service leave, totalling $48,250.

CARROTS FOR CEOs

An increasing number of fund chief executives are also now eligible for bonuses as part of their remuneration plan.

The same PRP that lifted Future Fund CIO Arndt’s base rate also substantially boosted fund chief Neal’s total remuneration, making him the highest-paid CEO in the survey. Neal’s base of $613,608 was supplemented with $610,605 in 2016-17, of which $413,111 was attributable to meeting investment performance targets – measured over rolling three-year periods – and $197,494 was for meeting personal performance targets.

The Future Fund provides that Neal may earn up to 120 per cent of his base pay through the various components of the PRP, and in 2016-17, he earned about 80 per cent of the total amount available.

Local Government Super chief Peter Lambert left the fund in April 2017 and made an unexpected entry into the top five in this year’s survey, after receiving a termination payment of $644,281 on top of his base pay of $436,115. The year before, Lambert’s total remuneration was $552,648, placing him 19th overall, at a level more commensurate with running a $10.5 billion fund.

Victorian Funds Management Corporation chief executive Lisa Gray received total remuneration of between $950,000 and $959,999 for the year, with a base salary between $540,000 and $549,999. While VFMC’s annual report doesn’t detail additional payments, it states that the board determines an incentive pool each year, based on annual investment returns, which is distributed among executives. QSuper’s Michael Pennisi received a short-term cash incentive payment of $332,598 (of which $66,625 is deferred for two years) and a long-term incentive payment of $28,410, plus other benefits, including superannuation and long-service leave. All this was on top of his base pay of $519,565, for a total package of $985,273.

 

“Given the complex nature of the QSuper group – including a wholly owned group life insurance business, a personal financial advice firm and mortgage broking services, and our in-house investment team and administration – the board seeks to ensure that the team is remunerated in line with the market,” QSuper remuneration committee chair Beth Mohle says.

Mohle explains that the fund’s executives are “subject to clear performance criteria relating to customer, member, people and risk perspectives, and remuneration includes a mix of fixed and variable payments explicitly linked to this performance”.

Over at Sunsuper, bonus payments and superannuation, including voluntary contributions, took chief executive Scott Hartley’s total remuneration to $938,992, including his base salary of $560,603 and a performance bonus, including superannuation, totalling $301,918. Three-quarters of that bonus will be paid in 2017-18, and one-quarter not until 2018-19. A component of Hartley’s bonus reflected in the current survey was earned for his performance in 2015-16.

Over at the country’s largest industry fund, AustralianSuper, Ian Silk was the sixth-highest paid chief executive in the survey, earning a total of $887,142.

Chart 2 shows analysis by Investment Magazine that plots CEO pay relative to fund size, as measured by funds under management. Those dots above the trend line indicate funds where pay was below average relative to fund size. Silk stands out as the best ‘value’ chief on this measure.

And unlike his deputy, Delaney, and other senior members of the AustralianSuper investment team, Silk was not incentivised with a bonus scheme.

AustralianSuper general manager of people and culture Margie Hill says performance-related pay structures must have clear targets, be available to the right staff, and not be too complicated.

“What’s good for Ian is good for many others [in the organisation] as well,” Hill says. “We pay very competitive fixed remuneration, of course, or else we wouldn’t attract and retain people. But we have a strong philosophy of not paying performance-based incentives.”

But perhaps the best test of a performance-pay scheme is not when bonuses are paid, but rather, when they are not paid. Hill says that in 2011-12, AustralianSuper paid out zero under its investment performance payment plan, after the fund failed to meet the target of exceeding the rate of inflation.

“Unlike other organisations, where there might be a bit of healthy fudging, it’s quite black-and-white here,” Hill says. “That’s the point about very measurable targets; it’s not just becoming a backdoor way to getting additional fixed pay, it’s very much about performance-driven pay.”

THE RIGHT INCENTIVES

Across the industry, funds are grappling with how to design incentive structures that get the most out of executives and deliver the best outcomes to members.

In 2017, Mine Wealth + Wellbeing – one of the earliest industry funds to adopt performance pay for a significant number of positions – decided to partially unwind its scheme and ditch bonuses for all but nine senior executives, including CEO Harry Mitchell, CIO David Bell and chief strategy officer Vasyl Nair.

Nair says a review of the fund’s strategic goals led to an evaluation of the remuneration structure and the decision to consolidate fixed remuneration with variable remuneration for most of those who participated in the variable pay scheme. Consolidating the variable component at 100 per cent meant no employee was worse off as a result; however, none of the team of nine who still receive variable pay emerged better off either.

The fund also enhanced its performance management framework, to mitigate the removal of variable remuneration as a blunt instrument to drive performance. While it’s early days, Nair says “a robust performance framework, in our view, more than counteracts the effect of not having a variable remuneration lever”.

Basically, he argues the mid-sized fund needed a remuneration plan that was less complicated and easier to administer.

Meanwhile, Cbus Super is heading in the opposite direction. The fund is expanding the scale and complexity of its incentives program to include more members of its growing investments team.

Cbus CIO Kristian Fok says the $40 billion construction industry fund has recently introduced a variable pay structure for a limited number of investment staff to help it attract and retain the best talent. While variable pay is “designed to drive successful outcomes for members”, he says it is still too soon to tell what impact it will have in practice.

The incentive scheme won’t be based only on investment returns.

“Key factors in the design of our program include a heavy focus on positive behaviours consistent with Cbus’ values and member-focused culture, fostering a shared responsibility for total portfolio outcomes, and an alignment with longerterm investing principles,” Fok explains. “When developing our variable pay program, we established appropriate measurement tools and, where possible, we have tried to keep the assessment criteria simple. Any payments earned from the program are spread over a three-year period.”

LOOKING AHEAD

It seems clear that incentive payments will only become a more common feature of super fund executive pay.

Executive recruitment firm Alexander Hughes’ managing partner, Asia-Pacific, Michael Swinsburg, says fund executives will, and should, continue to be rewarded for producing good results for members, but funds are still grappling with how to structure incentives to reward appropriate behaviour and performance without compromising a member-first ethos.

“I don’t see bonuses in some shape or form going away,” Swinsburg says. “I expect these to become more targeted, over time, to longer-term, three-years-plustype programs, particularly for senior executives.”

As they continue to build out expertise, “profit-for-members funds will probably make mistakes along the way, and could import poor culture”, he says. “But as long as they are looking to build more sustainable, high-functioning teams [rather than] squeeze in glamour individuals, which would be anathema to their culture anyway, then they should be on the right track.”

JANA executive director John Coombe says it’s still difficult to prove conclusively that performance-based remuneration leads invariably to better member outcomes.

“I don’t think you can,” Coombe says. “You would have to know all of the details [of a remuneration scheme] and you would have to monitor it over an extended period of time.”

He says a portion of executive pay should be deferred over at least three to five years or longer, to reflect a typical market cycle and tie executive remuneration more closely to longer-term member outcomes. And he adds that while funds do discuss performance-based remuneration among themselves informally, there is still inconsistency and disclosure needs to be addressed if funds are to make their case conclusively.

Reporting with thanks to lead researcher Reshma Gupta. 

CORRECTION | The original version of this story, in both print and digital, included a graphic ‘Chart 1’, which plotted CIO pay relative to their fund’s 3 year net returns. Due to a data entry error this chart, and therefore the accompanying analysis, was incorrect. Investment Magazine has chosen to remove this section of the story in its entirety and apologises for the error. 

Chief investment officer pay at the 50 biggest super funds

FUND FUM
($bn)
CIO OR
EQUIVALENT ROLE
BASE
REMUNERATION  ($)
STI ($) LTI ($) TOTAL
REMUNERATION ($)
UniSuper 62 John Pearce 589,480 724,517 1,433,738
AustralianSuper 119 Mark Delaney 680,890 714,890 1,430,780
Commonwealth Superannuation Corporation 38 Alison Tarditi 624,741 556,389 1,214,478
Future Fund 134 Raphael Arndt 568,421 556,334 1,144,375
QSuper 94 Brad Holzberger 504,141 442,048 994,439
Sunsuper 45 Ian Patrick 405,740 453,076 957,730
First State Super 64 Damian Graham 391,657 500,423 903,522
Equip Super1 14 Michael Strachan 77,157 794,972
Hostplus 24 Sam Sicilia 538,949 151,741 730,185
Mine Wealth + Wellbeing 11 David Bell 338,825 56,544 230,205 683,193
NSW Treasury Corporation (TCorp)2 84 Stewart Brentnall 670,900
Cbus Super 40 Kristian Fok 502,115 618,082
Qantas Super 7 Andrew Spence 399,000 189,525 588,525
Statewide Super 8 Con Michalakis 399,314 105,000 525,636
TelstraSuper 20 Graeme Miller 433,846 50,000 512,692
HESTA Super 40 Sonya Sawtell-Rickson 441,965 469,911
Local Government Super 11 Craig Turnbull 414,257 453,611
Maritime Super 5 Grant Harslett 369,891 435,113
BUSSQ 4 David O’Sullivan 345,828 24,693 429,811
Australian Catholic Superannuation 8 Michael Block 396,556 427,913
Catholic Super 9 Garrie Lette 372,066 407,066
Kinetic Super 4 Paul Kessell 322,262 31,963 387,876
Vision Super 8 Michael Wyrsch 350,979 383,372
Equip Super3 14 Troy Rieck 278,779 75,000 373,395
CareSuper 16 Suzanne Branton 335,117 366,425
Energy Industries Superannuation Scheme 5 Ross Etherington 328,383 358,383
TWUSUPER 5 Andrew Killen 313,645 356,486
Labour Union Co-Operative Retirement Fund 6 Leigh Gavin 319,692 350,000
NGS Super 8 Ben Squires 277,845 307,845
Club Plus Super 3 Gemma Dooley 224,017 42,500 287,799
legalsuper 3 Ed Smith 275,000 275,000
MTAA Super 11 Phillip Brown 244,455 273,352
Commonwealth Bank Officers Super4 10 Gerald Parlevliet 151,335 254,799
REST Industry Super5 45 Bredan Casey 189,462 34,332 467 251,194
VicSuper 19 Andrew Howard 222,507 235,385
Energy Super 7 William Graus 181,639 16,665 230,594
AustSafe Super 2 Simon Mather 196,477 220,194
WA Super 3 Chris West 155,096 181,765
Prime Super 4 Jane Kang 151,410 9,742 176,840
GESB 25 Benjamin Palmer 170,399 170,399
Australia Post Superannuation Scheme 7 Ezinne Udeh Martinez 85,254 32,726 132,364
Tasplan 7 Ian Lundy 97,576 20,000 123,384
Commonwealth Bank Group Super6 10 Ruwanie Dias 62,433 85,224
Funds SA 29 Richard Friend Not disclosed
Victorian Funds Management Corporation 56 Russell Clarke Not disclosed
AvSuper 2 Sue Field Not disclosed
Media Super 5 No CIO Not disclosed
LGIAsuper 11 No CIO 312,000 8,000 400,000
First Super 3 No CIO Not disclosed
Intrust Super 2 No CIO Not disclosed

Notes:
1. Retired on July 15, 2016; total remuneration includes $644,259 termination payment
2. Average remuneration of five highest-paid TCorp executives disclosed in annual report
3. Appointed July 15, 2016
4. Retired March 17, 2017
5. Appointed November 1, 2016
6. Appointed March 20, 2017
Source: Super fund annual reports, remuneration reports and websites. All data is for the financial year ended June 2017.

Chief executive pay at the 50 biggest super funds

FUND FUM
($bn)
CEO BASE
REMUNERATION ($)
STI ($) LTI ($) TOTAL
REMUNERATION ($)
Future Fund 134 David Neal 613,608 610,605 1,256,011
Local Government Super1 11 Peter Lambert 436,115 1,120,396
Victorian Funds Management Corporation2 56 Lisa Gray 540,000-549,999 950,000-959,999
QSuper 94 Michael Pennisi 519,565 332,598 28,410 985,273
Sunsuper 45 Scott Hartley 560,603 266,007 938,992
AustralianSuper 119 Ian Silk 824,100 887,142
Hostplus 24 David Elia 637,838 197,076 874,409
First State Super 64 Michael Dwyer 740,000 10,000 802,047
WA Super 3 John McNally 412,851 800,958
WA Super 3 Fabian Ross 135,669 152,212
Statewide Super 8 Richard Nunn 517,364 225,000 773,992
UniSuper 62 Kevin O’Sullivan 512,557 150,000 771,744
CareSuper 16 Julie Lander 479,134 716,490
Mine Wealth + Wellbeing 11 Harry Mitchell 474,964 111,903 697,984
TelstraSuper 20 Chris Davies 469,174 139,064 690,387
Commonwealth Superannuation Corporation 29 Peter Carrigy-Ryan 452,622 147,660 688,159
NSW Treasury Corp (TCorp)3 84 David Deverall 670,900
REST Industry Super 45 Damian Hill 490,891 112,544 17,885 664,145
VicSuper 19 Michael Dundon 523,054 93,953 661,457
Cbus Super 40 David Atkin 589,231 649,884
Qantas Super 7 Michael Clancy 400,000 220,000 620,000
Club Plus Super 3 Paul Cahill 213,322 597,013
Club Plus Super 3 Stefan Strano (Acting) 245,662 268,767
HESTA Super 40 Debby Blakey 551,424 585,653
Energy Industries Superannuation Scheme 5 Alexander Hutchison 515,593 584,142
Maritime Super 6 Peter Robertson 503,301 566,357
LGIAsuper 11 David Todd 455,000 561,000
Commonwealth Bank Group Super 10 Doug Carmichael 277,758 555,465
Vision Super 8 Stephen Rowe 500,500 544,213
Australian Catholic Superannuation 8 Greg Cantor 492,377 529,487
NGS Super 8 Anthony Rodwell-Ball 491,521 526,521
Tasplan 7 Wayne Davy 467,492 487,108
Australia Post Superannuation Scheme 7 Stephen Milburn-Pyle 337,788 99,608 486,574
Prime Super 4 Lachlan Baird 380,044 20,875 481,719
Intrust Super 2 Brendan O’Farrell 434,498 479,498
Funds SA4 29 Jo Townsend 467,000-477,000
Catholic Super 9 Frank Pegan 439,235 474,235
AustSafe Super 2 Craig Stevens 337,612 54,442 451,602
legalsuper 3 Andrew Proebstl 439,777 439,777
Energy Super 7 Robyn Petrou 341,550 37,656 428,343
MTAA Super 11 Leeanne Turner 375,991 423,759
GESB 25 Howard Rosario 421,707 421,707
GESB Benjamin Palmer
AvSuper 2 Michelle Wade 367,888 18,250 421,087
Equip super 14 Nicholas Vamvakas 285,836 72,915 378,367
Labour Union Co-Operative Retirement Fund 6 Charlie Donnelly 341,731 376,731
BUSSQ 4 Linda Vickers 265,919 13,664 363,988
First Super 3 William Watson 312,845 361,537
TWUSUPER 5 Frank Sandy 300,881 340,575
Media Super 5 Graeme Russell 316,803 337,577
Kinetic Super 4 Katherine Kaspar 252,326 280,004

Notes:
1. Retired April 27, 2017; includes termination payment of $664,281
2. Highest-paid “responsible person” disclosed in annual report
3. Average remuneration of five highest-paid TCorp executives disclosed in annual report
4. Highest-paid executive disclosed in annual report
Source: Super fund annual reports, remuneration reports and websites. All data is for the financial year ended June 2017.

Chair pay at the 50 biggest super funds

The chairs in the survey earn nothing like the salaries of the top executives they govern.

TWUSUPER chair David Galbally again topped the list of highest-paid chairs, earning $277,200 for the year, despite the fund being one of the least complex and smallest in the survey, with less than $5 billion in funds under management. Galbally’s remuneration was unchanged from the previous year, and again paid to Madgwicks Lawyers, a legal rm where he is a partner.

Despite TWUSUPER being just 3.6 per cent the size of the $134 billion Future Fund, Galbally’s fee was more than 25 per cent higher than the $206,330 the sovereign wealth fund paid its chair, Peter Costello (in third place). Similarly, even though TWUSUPER is about 4 per cent the size of AustralianSuper, Galbally made more than 44 per cent above the $192,167 earned by its chair, Heather Ridout.

A written statement provided by TWUSUPER chief executive Frank Sandy said Galbally’s fee was “commensurate with his role as an independent chair” and acknowledged the “considerable time, effort and expertise” associated with the role.

David Leggo was the second highest-paid chair, earning $226,097 at $20 billion corporate fund TelstraSuper. That’s more than the $203,000 $45 billion fund REST Industry Super paid to its chair, Ken Marshman (the fth highest-paid chair in the survey).

Until 2013, the directors of REST were paid nothing except out-of-pocket expenses, but since 2014, director remuneration has been calculated according to the complexity and depth of each director’s individual involvement with the board and its committees. REST directors’ remuneration is due to be reviewed again this year.

 

FUND FUM
($bn)
CHAIR BASE
REMUNERATION ($)
TOTAL
REMUNERATION ($)
TWUSUPER 5 David Galbally 277,200
TelstraSuper 20 David Leggo 181,029 226,097
UniSuper 62 Christopher Cuffe 202,922 222,200
Future Fund 134 Peter Costello 206,330 206,330
REST Industry Super 45 Kenneth Marshman 185,388 203,000
AustralianSuper 119 Heather Ridout 175,495 192,167
First State Super 64 Neil Cochrane 176,198 188,904
HESTA Super 40 Angela Emslie 165,818 181,571
Mine Wealth + Wellbeing 11 Grahame Kelly 177,350 177,350
Hostplus 24 David Elmslie 135,826 165,695
Cbus Super 40 Steve Bracks 144,971 158,743
Qantas Super 7 Anne Ward 109,589 158,252
MTAA Super 11 John Brumby 137,542 150,608
Commonwealth Superannuation Corporation 38 Patricia Cross 132,680 145,654
Equip Super 14 Andrew Fairley 131,273 143,744
Victorian Funds Management Corporation1 56 James MacKenzie 130,000 – 139,000
Kinetic Super 4 Frank Gullone 119,000 132,685
LGIAsuper 11 John Smith 95,000 130,000
Vision Super 8 Brian Parkinson 116,912 128,018
Club Plus Super 3 Tara Moriarty 111,977 127,542
GESB 25 John Langoulant 126,728 126,728
Sunsuper 45 Ben Swan 111,271 126,158
AustSafe Super 2 Henry Smerdon 103,345 113,163
Statewide Super 8 Ken Williams 98,183 107,632
Australian Post Superannuation Scheme 7 Mark Birrell 107,210 107,210
CareSuper 16 Catherine Wood 97,824 107,117
Maritime Super 5 Paddy Crumlin 105,913 105,913
Labour Union Co-Operative Retirement Fund 6 Tim Kennedy 88,951 103,401
Tasplan 7 Naomi Edwards 94,087 103,025
QSuper 94 Karl Morris 102,904
Commonwealth Bank Group Super 10 Neil Cochrane 91,424 100,109
Funds SA 29 Kevin Foley 90,000 – 99,000
legalsuper 3 David Miles 98,974 98,974
Catholic Super 9 Peter Bugden 63,610 98,550
WA Super 3 Tim Shanahan 89,493 97,999
VicSuper 19 Christine Stewart 86,817 95,065
NGS Super 8 Dick Shearman 83,203 93,187
Prime Super 4 Alan Bowman 79,569 87,128
Energy Super 7 Mark Williamson 74,695 85,237
First Super 3 Lisa Marty 76,589 85,227
First Super 3 Michael O’Connor 74,525 79,669
AvSuper 2 George Fishlock 75,887 83,096
BUSSQ 4 Bob Lette 75,223 82,370
Local Government Super 11 Bruce Miller 74,237 81,290
Energy Industries Superannuation Scheme 5 Stephen Butler 71,460 78,249
Media Super 5 Gerard Noonan 69,105 75,670
Australian Catholic Superannuation 8 Richard Haddock 60,091 65,800
Intrust Super 2 Gary Bullock 31,750 31,750
NSW Treasury Corporation (TCorp) 84 Philip Chronican Not disclosed

Note:
1. Second-highest-paid “responsible person” disclosed in annual report
2. In all pay tables, remuneration beyond base pay may include bonuses, non-cash benefits, deferred cash benefits, super, and miscellaneous payments such as training fees and reimbursement
of travel expenses or health and wellbeing expenses.
Source: Super fund annual reports, remuneration reports and websites. All data is for the financial year ended June 2017.

As is tradition, our first issue for the new year includes the annual Investment Magazine Super Fund Salary Survey.

We first began collating and comparing pay data for the chief executives, chief investment officers and chairs of the country’s largest non-profit funds four years ago.

Some of the executives and trustees whose salaries are highlighted in the survey are understandably made a bit uncomfortable by it. A few have noted that gawking at other people’s pay packets is all a bit gauche.

That said, the readership numbers on Google Analytics don’t lie. So, don’t deny you love it. Even if you do complain.

One challenge with the survey is that inconsistent rules in how the regulator requires MySuper and Choice fund providers to disclose their remuneration data lead to the survey excluding retail funds, which typically pay more generously.

But the thorniest issue with the Super Fund Salary Survey is its inability to place big pay and bonus packages in the context of the relative value they represent for super fund members.

For the financial year ended June 30, 2017, UniSuper CIO John Pearce was the highest-paid executive in the non-profit funds sector, taking home more than $1.4 million, over half of which was earned via short term incentive payments.

In quantitative terms, he was the biggest earner in the industry.

Considering that through the murkier lens of qualitative analysis, all indicators point to Pearce’s salary representing bloody good value to UniSuper members. The CIO leads one of the biggest, most complex, investment teams in the country; it’s well-governed and consistently high-performing. And more than half of his pay was at risk.

So, who cares how much he (or any other fund exec) earns so long as it results in better net returns to members over the long term?

In defence of the Super Fund Salary Survey, while a simple list comparing individuals’ remuneration fails to capture the nuances of relative value, a clear and comparable view of these facts is a necessary starting point for an informed debate about whether the sum and structure of how super funds pay their key people is appropriate.

The strongest theme evident in the latest data is that performance linked bonuses, long standard in the retail funds, are quickly becoming the norm in the non-profit sector.

Our recently departed editor-at-large Simon Hoyle spoke to remuneration experts to glean their insights into why funds are going down this path to attract and retain top talent, and how they are ensuring incentives are aligned with the cultural values they wish to promote.

Getting this right will be critical to the competitiveness and efficiency of Australia’s super system.

For evidence of what happens when an industry is hampered in its ability to pay market rates for talent, let us look no further than Australian Parliament.

Chief investment officer pay at the 50 biggest super funds

Chief executive pay at the 50 biggest super funds

Chair pay at the 50 biggest super funds