Macmahon chairman Ken Scott-Mackenzie said Bowen’s total fixed remuneration was 19.2% higher than Carroll’s $990,000 base salary for the 2013 financial year.
Carroll’s agreed salary is actually $1.1 million, but like all directors and senior executives he will take a 10% pay cut this year as part of an austerity measure the company imposed “in light of current market conditions”
“The board and management team are committed to contributing to the cost-saving measures being implemented across the business and wish to set an example,” Scott-Mackenzie said in a statement today.
He said the difference between Bowen and Carroll’s packages “increases significantly” after taking into account short-term and long-term incentives.
Bowen earned a total $3 million in 2011 and $2.8 million in 2012.
Carroll, who took over as CEO when Bowen resigned in September, can receive a maximum of just over $2.2 million this year if he meets all performance targets.
To address shareholder concerns that the incentive structure encourages CEOs to pursue short-term gain at the expense of long-term stability, Carroll’s contract allows Macmahon “in certain circumstances” to take back up to 30% of STIs up to two years after they are paid.
If more than 25% of shareholders vote against Macmahon’s remuneration report at the company’s annual general meeting on Friday, that will count as a “first strike” under Australian Securities and Investments Commission rules introduced last year.
If a company receives a “second strike” the year after the first, it must put a resolution to the AGM to spill its entire board.
The spill resolution requires 50% shareholder approval.
This article first appeared in ILN's sister publication ConstructionIndustryNews.net.