Executive pay in Australia due for shake-up

New laws designed to curb executive salaries in Australia will be released in draft form next month, following a study that found a widening pay gap between chief executive officers and their employees.

The analysis of chief executive remuneration by the Australian Council of Trade Unions revealed that executive pay rose by more than $940,000 (£581,000), or 17.2 per cent, last year.

In contrast, the average annual wage of a full-time worker rose by just $3,200 (£1,977), or 5.2 per cent.

Proposed reforms to corporate governance in Australia include giving shareholders greater control over executive pay and eliminating incentives to make risky, short-term decisions.

"Some of these changes are being driven by investor demand," commented David Bradbury, Australia's parliamentary secretary responsible for drafting the changes.

"For example, many institutional investors are taking even greater note of how a company's reputation is playing out in the wider community and how that contributes to value."