Market Remuneration Benchmarking

The setting of remuneration for directors and senior executives needs to consider market practice for similar roles, in companies that are similar to theirs – competing for the same talent.

GRG Remuneration Insight 183

29 November 2025

Remuneration Benchmarking

For boards to form a view on the reasonableness of remuneration for directors and senior executives they need to consider market practice for similar roles. Accordingly, when boards request market remuneration data, they require it to be from companies that are similar to their company and are often seen as competitors for talent.

For ASX listed companies the most relevant companies against which to compare remuneration practices are other ASX listed companies. Unlisted companies are far less relevant as they tend to adopt different approaches to remunerating directors and senior executives and often pay lower levels of remuneration than ASX listed companies, particularly in respect of total remuneration that includes equity.

Understanding the ASX Market

Following are two matrices which provide a summary of the ASX market in terms of the number of companies available to benchmark against, within GRG’s online self-assessment, ERS remuneration database. The data in this database is now available as an “on-demand” static market data cut, delivered in a PDF within hours. While the matrices include most ASX listed companies, it should be noted that of the companies with a market capitalisation of <$25 million only a sample has been included (presented in both tables). Both tables show industry sectors on one axis. The two tables arise because two different measures of size/scale are available as the variable in sample selection being a) market capitalisation and b) revenue. In this regard it should be noted that market capitalisation tends to have a stronger correlation with remuneration levels than revenue. It should also be noted that sample sizes may be larger for internal databases used by GRG consultants.

Targeted Remuneration Data

Targeted remuneration benchmarking may be undertaken by selecting the industry sector and size range that is relevant to the company. There are several points that should be noted about the ASX spread of companies:

1. As indicated by the grey shading there are many industry and size combinations that fall short of an adequate sample size.  As a guide we have assumed a minimum of 5 companies to constitute an adequate sample size.  Of course, lager sample sizes are preferable.
2. Even when sample sizes are inadequate a tailored sample can be used to produce an adequate sample.  This will involve expanding the size range and/or spreading the industry sectors covered.
3. When expanding the coverage beyond the standard sample cut it should be kept in mind that remuneration quantum tends to increase as company size increases.  This can have an impact on the quality of the data if the expanded data set is not from a balanced group of companies with 50% larger and 50% smaller than the target company size.
4. The data based on revenue shows a heavy skewing of companies to those with revenues of <$25 million which leads to all other revenue ranges being smaller than comparable market capitalisation ranges. This is why correlation tends to be poorer for revenue, because companies at very different scales, stages of development, and market positions, may have comparable revenue.
5. When sample sizes are small it may be prudent to look at the samples for the next smaller and larger companies to see if the sample being considered is consistent with the trend indicated by the higher and lower company samples.

Indicative Data Outputs

The following table presents an illustration of the outputs that may be expected from a targeted remuneration data interrogation.  Points to note from the illustration include:

1. All of the main constructs of remuneration for an executive role are covered including: Fixed Pay, Total Variable Remuneration and Total Remuneration Package.
2. The percentiles of market practice normally of interest to boards are covered.
3. % receiving each element is covered so as to help boards gain an understanding of the extent to which each element is provided in the market.
4. Through Target and Stretch values being included, the policies of companies can be analysed.  This is preferable to statutory reported outcomes because:
   1. Statutory/actuals for STI can be volatile (very high in some periods or sectors and very low or nil in other sectors or periods, e.g., during the Covid pandemic) and therefore less useful when setting a company’s policy, and
   2. Statutory reported amounts for LTI tend to understate policy in almost every circumstance because of the operation of AASB2 for reporting share-based payments. An exception is when a share-based payment is settled in cash at a higher value than the grant value.

Conclusion

Accessing targeted cuts of data can be a cost effective way of checking if a company’s current remuneration arrangement for an incumbent of a role is consistent with market practice. If not, the data will provide a guide to changes that should be considered. When standard approaches do not offer comparison results that are likely to be accepted by key stakeholders, that is when consideration of tailored comparator groups should arise – something that GRG’s consultants specialise in advising on.

For more information in relation to targeted on-demand executive remuneration data cuts, please see our page on Executive Remuneration Benchmarking on Demand.