Remuneration of CEOs in the ASX200, based on the estimates from the end of year financial reports, is underreported by millions of dollars.

Australia’s 10 highest-paid chief executives collectively reaped $70 million more than reported in their companies’ FY14 annual reports, according to new research from the Australian Council of Superannuation Investors (ACSI).

ACSI’s annual study is the first to systematically capture the value of remuneration received by chief executives across the S&P/ASX200 index in a financial year, rather than the usual estimates of the value of their pay included in annual reports.

Based on statutory reporting (“reported pay”) the top 10 chief executives’ earnings totalled $99.63 million in 2014 – but through exercising options and performance rights, along with the vesting of shares under long term incentive schemes, the total value of cash and equity received in the year jumped to $171.4 million.

“These figures suggest that the existing requirements for reporting executive pay may significantly understate the rewards received in a given year. Statutory reporting is, perhaps, disclosing only the tip of the iceberg in terms of the wealth accruing to senior executives,” said ACSI’s chief executive, Louise Davidson, in launching the study, CEO Pay in ASX 200 Companies carried out by Ownership Matters for ACSI.

The average realised pay in the ASX100 was $5.63 million, compared to average reported pay of $5.01m (up 3.4% on reported FY13).

In some cases, however, chief executive pay was shown to have been overstated by conventional reporting – mostly because their companies did not perform sufficiently strongly to allow equity awards to vest. The realised pay calculations also show how executives who received comparatively modest pay on a reported basis, can leapfrog their peers thanks to the leverage of equity rewards.

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