The Global Financial Crisis reshaped Key Management Personnel (KMP) remuneration, changing expectations for executive pay, director remuneration and corporate governance. Explore the latest trends in Executive and Non-Executive Director remuneration and how KMP pay has evolved in today’s governance environment.
GRG Remuneration Insight 188
3 August 2026
25 Years of Data: GRG’s Unique View on KMP Pay Trends
GRG is one of the longest standing KMP remuneration advisors in Australia; this year we are celebrating 25 years of specialist KMP remuneration governance investment with a stable, local team of specialist experts. As part of reflecting on this long history as a participant in the KMP remuneration market, we are offering a series of insights looking back at remuneration trends over the last 25 years. GRG offers a deep database and experienced consultants that have weathered major cycles in markets alongside clients. This means we can include a data-driven approach in our reflections, alongside lived experience balancing stakeholder tensions. As the world is enduring yet another crisis in this relatively short period, this Insight reviews how KMP Fixed Pay has changed (or not), focusing on the period since the GFC, when regulator, public and shareholder sentiments started to shift expectations, into the modern governance era.
Executive Fixed Pay Keeps Rising – Even When Markets Fall
Looking back over our longitudinal market data, we can observe that while short periods of uncertainty often lead to conservatism, the damming of executive pay tends to be unsustainable (e.g. Covid-19 period); at some point even frozen pay markets turn from glacier to torrent. Even when markets are falling, executive pay generally continues to rise. For whatever reason, executives appear to be immune to the wealth creation challenges often facing other stakeholders and broader society, even when shareholder wealth creation is negative. Pre-GFC, most KMP experienced growth on their income that rivals long term share market investment returns. Even though executive Fixed Pay increases appear to have been modulated, they still seem to outstrip broader pay markets and even inflation.
MD/CEO Pay: More Sensitive to Market Conditions, But Still Growing
While executive Fixed Pay generally appears to be immune to the experiences of other stakeholders, the movements for MD/CEO roles do appear to be somewhat sensitive to what is going on in the world. This is likely because this is the executive role that boards, proxy advisors and indeed shareholders more broadly focus upon, in terms of executive remuneration governance. This is the role that is accountable for long term shareholder value creation and when that value is being destroyed, additional scrutiny is most acute for this role class.
NED Remuneration: Undervalued and Falling Behind
There is one KMP role in respect of which remuneration movements appear almost over-sensitive to stakeholder experience; non-executive directors (NEDs). GRG has observed firsthand that NEDs will tend to be the first to put their hands up for a pay cut, or to exercise restraint on remuneration, when stakeholders are suffering. Indeed, NEDs appear to be harsher on themselves, than on executives, in a way that shareholders and proxy advisors appear not to be. NED roles are already very lowly paid for the critical function that they fulfil; GRG’s previous insights show that their per-diem rates (rate of pay for a day of work) is exceptionally low, compared to other KMP, despite the fact that most incumbents are experienced executives, and generally carry more risk than any other KMP except perhaps the MD. A risk aversion appears to have led to NED pay increases stagnating, and falling far behind executive pay, broader market pays movements and even inflation. This is something that should perhaps be remedied, particularly given the increasing risks that NEDs are asked to govern in an increasingly complex global market.
The Hidden Problem: Shrinking KMP Disclosure on the ASX
One of the more disturbing trends that GRG has observed over the last 25 years, is an insidious, gradual erosion of transparency. In 2011, the median number of executive KMP roles disclosed in ASX annual reports was around 8 executive KMP roles. In 2025, it has fallen to around 3.5. This is despite the fact that the definition of KMP has not changed in that time – it is still “those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly”. This clearly captures any members of the senior leadership team or executive committee – any direct reports to the CEO who collectively, even if indirectly, direct and control the activities of the business. That is what it is to be an executive after all. While it is not clear which stakeholders are driving it, there has been a risk-averse view that disclosure is bad, and for some reason Boards are regularly expressing the view that if the ability to direct and control is not direct then it is not KMP, despite this view being erroneous. This gap is no more evident than when clients approach a consultant for benchmarking work; suddenly the executive KMP group to be benchmarked is typically around 8 to 10 roles, even when the Company is only disclosing 3. GRG has observed in its practice, and as somewhat evident in the retrospective analysis, the myopic focus of many stakeholders including proxy advisors and boards upon CEO pay, has led to a lack of discipline around broader executive team pay. If this were not true, we would be observing similar relationships between market trends and KMP roles; instead, what we see is that fixed remuneration changes for those roles that are the focus of Board remuneration governance and disclosure (NEDs and the MD/CEO) are more variable, while other roles seem to escape variation.
25 Years of ASX and KMP Pay: A Data-Driven Review
For context, here is a summary of what it has been like to ride the waves of ASX fortunes, using the ASX 200 as an indicator, which is often mirroring global markets, looking back to 2007 which we can then link to the market and pay movements observed:
In the lead-up to the 2007 market crash (GFC), Australia’s economic boom was leading into runaway growth in KMP remuneration for all role types (MD/CEO, Direct Reports and NEDs). The GFC was an unwelcome shift in market returns that led to major changes in market and community sentiment that would forever change the nature of KMP remuneration governance. Business culture shifted very quicky away from the indulgences of the 90s and early 2000s; client tightened their consulting purse strings, the chocolate biscuits disappeared from break rooms all across Australia, and travel became only-when-absolutely-necessary. Things never quite returned to the pre-crash normal, but it was only one of many global and market shocks to come in the first decades of the new millennium.
The massive losses experienced by shareholders and the community drove a new interest in corporate governance. Sarbanes Oxley and similar legislation around the world expressed a new standard in key board governance processes needing to be independent. The Australian productivity royal commission took all of these factors in and produced new standards of governance for our local market which would go beyond audit and seek to give shareholders more of a voice in the boardroom. While the focus may have been independent advice and remuneration, it was a stated intent that shareholder votes could be a general opportunity for shareholders to express concerns, not only in regard to remuneration matters.
In 2011, the new “two strikes” legislation was coming into effect and for the first time, shareholders had a direct (non-binding) vote on KMP remuneration governance. The impact on pay movements was virtually immediate, clear and sustained, as can be observed in the analysis shown above. The pre-GFC market movements were never seen again (with the exception of an interesting anomaly in 2014, some may view as executive pay “post GFC conservatism bounce”); the exponential growth in executive pay in Australia, was curtailed. While many may feel that executive pay still unfairly grows faster than for anyone else, it has certainly become more reasonable since the two strikes rule gave shareholders, proxy advisors and institutional investors a clear voice on the matter. As a result, while unrestrained executive pay in markets like the USA has resulted in executive pay multiples (vs median pay) launching into space along with the billionaires, whereas in Australia, executive pay remains relatively reasonable, at least by comparison. Interestingly this has led to increasing discussions in the Board room regarding whether or not international pay markets should be considered when benchmarking Australian executive pay (generally they should not, unless the executive is sourced from and operating in a foreign market).
The Role of Remuneration Consultants in Shaping the Market
As the most relied upon KMP remuneration advisor to ASX listed companies over the last 5 years (as disclosed in the annual reports of listed companies), surely GRG must take some responsibility for these outcomes. After all, Boards rely upon us to provide an independent, unbiased assessment and advice on changes, to inform their decision making. To some extent GRG and its peers are merely reflecting market practices; when we undertake benchmarking work for clients, we are looking at retrospective, factual disclosures of peers. However, how that sampling undertaken is critical. GRG has, we believe, a reputation for taking a balanced, some might argue “conservative” approach to benchmarking. We tend to focus on sustainable market position, caution clients against benchmarking at peaks, attempt to dissuade clients from benchmarking against USA market data unless it is genuinely relevant to a client, and build comparator groups that are balanced and limited to tight ranges around expected market position. Not all consultants do this; while the process should be independent, many consultants avoid technically making a recommendation, and appear to be influenced to benchmark using companies that are not reasonable comparators, because executives argue there is some risk of talent loss or competition for customers that makes them relevant (it is not uncommon for GRG to hear that executives want to benchmark against some of the largest companies in the USA, for example). GRG generally has the aim of being objective and
balancing stakeholder tensions (including the expectations of shareholders – after all, the vast majority of the Australian public are shareholders in the ASX 300 via superannuation). However, there are of course areas of subjectivity that can lead to inflation; when we are dealing with retrospective market data, we must project that data into the future remuneration cycle. GRG uses its longitudinal market analysis and long term consultant experience to inform its forecasting rates, and we generally do so with the intent of being within 1%, but erring on the side of conservatism so as not to inflate market movements. In this way we do not unnecessarily drive up market data. However, there is another subjective element to the benchmarking work that GRG undertakes; role grading adjustments, and incumbent-specific adjustments. It is very common for Boards to receive feedback from their executive teams that the roles as they exist in their organisation design, the specific job design in that place, is larger than the roles we are benchmarking against in the market. This typically leads to roles being “bumped up” to a grade higher than the benchmark would indicate, and leads to a pay band that is higher than the market median. Further, almost all companies adopt a range of +/-X% around a pay band midpoint, to recognise individual incumbent calibre, experience and long term performance. More often than not, executives are judged to be “above expectations” rather than below, which again leads to inflation. While most Boards do these things with the intent of being kind, retaining talent, rewarding loyalty in the team and improving competitiveness of pay, it does have an inflationary impact in the market. All of these subjective aspects need to be handled consciously and with caution if reasonable and appropriate, objective outcomes are to be arrived at.
That said, we are also aware that many of our peers in the industry take a much more relaxed approach to providing benchmarking, market positioning and strategy, and appear to support executive pressure to increase Fixed Pay in a way that outpaces any market (general staff or the share market). Many avoid technically making a “remuneration recommendation” and therefore appear to avoid the need to operate independently from the KMP to whom their services relate. In my experience, any KMP remuneration consultant that does not provide a recommendation that triggers the requirements of independence and disclosure by technically avoiding “advice”, should be viewed with some scepticism unless the Board has tight oversight and control regarding the independence and objectivity of the process at all stages. Even “show your workings” is increasingly skipped over in a world where AI summaries exclude the important considerations and caveats, and deep consideration powered by critical thinking is replaced with generic iconography in the briefest PowerPoint summaries possible. This practice appears to be increasingly common; where advice is avoided, having a well informed, experienced and well supported remuneration committee becomes essential. That can often come from the relationships individual NEDs have built with consultants who don’t just deliver a product, but build partnerships, substantiate their work, and provide education resources alongside their outcome tables. Sitting down with the remuneration committee to discuss the challenges of governance and managing stakeholder tensions in the specific circumstances of the day is usually the most important part of the remuneration benchmarking exercise. This is something that the statistics and data on majority market practices cannot provide.
What 25 Years of KMP Pay Tells Us and What Should Change
While Australia appears relatively “rational” compared to the excesses of some foreign markets, there appears to remain something of a disconnect between changes in executive pay, in particular, and the fortunes of the world in which executives operate. NEDs appear to, unfairly, cop the brunt of remuneration conservatism expectations, while carrying excessive risk for the rewards, relative to their KMP peers. NEDs should, in GRG’s view, consider correcting their remuneration market by providing more regular increases that more closely resemble broader KMP market movements, or at the least inflation, given the increasing risks they are managing. Perhaps they should also consider whether the processes driving executive pay increases in times of stakeholder volatility are truly independent, and whether the outcomes appropriately balance stakeholder tensions to ensure appropriate outcomes over time, both within their specific businesses, and as participants in a broader Australian KMP market.
