Perpetual Ltd. chairman Peter Scott said at the November 3 annual general meeting “the recent performance of the company has not been acceptable” and the fund manager may “fundamentally re-think how we reward the staff.”

Perhaps “a proportion of remuneration could be determined in a much more subjective than formulaic way,” says Scott. Still, he says he has reviewed executive salaries at Perpetual and found them “pitched about right.”

But the Australian Shareholders Association is critical of the remuneration of senior Perpetual executives. Perpetual shares have declined more than 40 per cent over the past year.

“I’m hurt and humbled” by the company’s performance, says Philip Twyman, a member of the Perpetual board.

Chris Ryan, the company’s chief executive, will make about $2.45 million, half of which is base salary and half a short-term performance bonus, says David Jackson, a company monitor with the Australian Shareholders’ Association.

“Short-term incentives are too easy to achieve,” says Jackson. “Chris Ryan can easily make twice his base pay through short-term incentives. CEOs should be focused on long-term rather than short-term.”

Perpetual’s shares have fallen more than 70 per cent over the last five years. About 75 per cent of the company’s revenue is tied to financial markets, says Scott. The All Ordinaries index is at about the same level as it was six years ago, he says.

Scott is happy with Ryan and his decisions.

“The business is in good shape,” Scott says.