The income gaps between chief executives and employees is widening, according to new research.
The number of chief executives in New Zealand paid over $500,000 increased five-fold between 1997 and 2013, research from the University of Otago shows.
University of Otago Business School researcher Dr Helen Roberts' study shows New Zealand chief executive pay is increasing in real terms - almost five times faster than worker income in New Zealand.
Almost half of New Zealand chief executives now earn at least $500,000 as the cash component - a mix of salary, incentive payments, retirement savings and other benefits - of their compensation package in 2013, compared to only 10 per cent of chief executives in 1997.
"In real terms, the average total chief executive compensation is up 114 per cent in 17 years, while average real worker income is up 26 per cent, confirming there is a widening gap between the chief executive income and that of their workers," Dr Roberts said.
The highest paid executive of a listed New Zealand company this year is Fonterra head Theo Spierings, who received an $8.32 million salary package.
Mr Spierings' 2017 base salary was $2.463m, plus benefits of $170,036, short-term incentive pay of $1.832m and long-term incentive pay of $3.855m, which worked out to an annual increase of 78.5 per cent.
The benchmark for chief executive remuneration in New Zealand was set by Telecom's Paul Reynolds in 2012, Dr Roberts said, with his payout package totalling $9,150,888. This included a large cash salary plus payout for the value of equity incentives converted to cash.
Income fluctuates from one year to the next but while some downturns, like the Global Financial Crisis, for example, dampened the increases, they still rose, he said.