THE
global economic slowdown has taken its toll on CEO salaries, with
executive pay packages slashed by almost 7 per cent in the year to May.

Global
consulting firm Hay Group said the financial crisis had significantly
cut into executives' pay in Australia, with chief executives' total
annual reward -- fixed pay plus annual incentives -- declining by 6.8
per cent.

"This reflected the downturn in corporate profits over the past 12 months," the survey said.

This is the first time that total remuneration of CEOs has gone
backwards since Hay Group started collecting such data more than 10
years ago.

"These are interesting times," said Trevor Warden, head of executive
reward consulting at Hay Group. "As CEO salaries are closely linked to
performance, if company profits have declined because of the global
economic downturn, then the CEO's total remuneration will also suffer."

The portion of CEO pay tied to fixed salaries showed a sharp
slowdown in growth -- up by only 2.8 per cent in the year to May
compared with 10 per cent a year earlier.

"The results of Hay Group's extensive survey show that there is a
very strong link between reward for CEOs and company performance," Mr
Warden said.

"Performance-based pay is a reality in difficult times, and what goes up can also come down."

Chief executives' salary packages were the most closely linked to
corporate results of any senior executive team -- "which is why their
pay has adjusted significantly to the recent economic and profit
downturn. These days, an increasing portion of CEO total reward is
provided in incentive-based pay, hence the overall decline in reward in
the past year".

"The interesting thing is the CEO total reward had declined at a
time when most wage and salary earners still enjoyed relatively good
pay rises, thanks to recent enterprise bargaining

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