Executive Compensation

Addressing the Asymmetry in Pay and Performance

Executive pay in corporate Australia has continued to climb—often regardless of whether company performance or broader economic conditions justify it. This growing asymmetry between pay and performance is no longer just a governance issue; it raises fundamental questions about alignment, accountability, and long-term value creation.

At Chester Asset Management, we’ve developed a practical framework to assess whether executive remuneration structures are delivering fair outcomes. By bench-marking compensation against real-world indicators—such as average wages, housing affordability, and total shareholder returns—we aim to provide a clearer, more grounded view of what constitutes appropriate pay.

In this paper, we examine the distinction between ‘owners’ of capital—executives with meaningful personal investment in their companies—and ‘stewards’ of capital, who may lack the same alignment with shareholders. We also assess the effectiveness of incentive structures, the impact of CEO tenure, and the increasingly important role of shareholder engagement in shaping outcomes.

At a time when scrutiny is growing and stakeholder expectations are shifting, we believe it’s critical to bring greater transparency and purpose to the way executive pay is structured and justified.

Read the full research paper