Big companies need to lift transparency around chief executive bonuses or risk the wrath of shareholders, the Australian Council of Superannuation Investors has warned.
ACSI chief executive Louise Davidson says remuneration reports will be closely scrutinised ahead of the upcoming annual general meeting season for ASX-listed companies, and those found lacking will risk a "strike" against their board.
On Tuesday, an ACSI survey found CEO paypackets at Australia's 100 biggest companies were back to pre-global financial crisis levels in 2017, thanks to an 18 per cent jump in the value of bonus payments.
If, during the coming reporting season, companies fail to improve disclosure of the measures and hurdles used to calculate bonuses, ACSI will recommend shareholders vote against the remuneration reports at the AGMs.
ACSI found all but six of the 80 CEOs eligible for a bonus in 2017 received one.
"We want to see a greater level of transparency and disclosure around both what the measures are and the assessments against those measures," Ms Davidson said on Tuesday.
"In cases where we're not confident about the level of vigour that has been applied to the new proposed awarding of bonuses, we can recommend that our members vote against the remuneration report at the AGM.
"Now that's a non-binding vote, but nevertheless sends a powerful signal."
Under the "two strikes rule", if more than a quarter of shareholders vote against a remuneration report over two consecutive years, a vote will be held on spilling the company's board.
Ms Davidson said she wanted to see self-regulation but ACSI would support tougher, enforced regulation if voluntary action was not making improvements.
The surge in bonus payments saw the average reported pay rise to $5.5 million in 2017 - levels not seen since before the global financial crisis in 2007, according to the ACSI study.
The average "realised pay" - a figure that includes the value of share-based payments realised during the year - for the top 100 CEOs was $6.2 million.
Prime Minister Malcolm Turnbull was critical of CEO pay levels on Tuesday, calling them "extraordinarily high".
The survey found that Domino's Pizza boss Don Meij was the nation's highest-paid CEO with a realised pay of $36.84 million last year after he exercised options to acquire shares worth $35.7 million.
