CEO pay increasing 5 times faster than workers: study

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Chief executives' pay is going up almost five times faster than workers' income, a University of Otago study has found.

The research, by accountancy and finance researcher Helen Roberts, found that half of chief executives earned over $500,000 as the cash component of their annual pay package in 2013 - when the data was collected - compared to just 10 per cent of CEOs in 1997.

"However, cash only presents some of the picture; total compensation and real wealth has more than doubled since this research began, with considerable change recorded in the last decade," Roberts said.

"In real terms, mean total CEO compensation is up 114 per cent in 17 years while mean real worker income is up 26 per cent, confirming there is a widening gap between the CEO's income and that of their workers."

Chief executives were paid 30 to 50 times more than the average wage of about $26 an hour.

"The ever-widening pay ratio is an international trend - the CEO pay ratio in the United States, for instance, is typically between 300 and 500, but in some cases exceeds 1000 times ... the average wage."

The longitudinal study was based on financial information gathered from publicly-listed companies.

The study also tracked these companies' economic performance alongside chief executive remuneration to examine the link between CEO pay and company annual results.

"This clearly demonstrates an overall trend of marked growth over time which is not on the same trajectory as the economic ups and downs of publicly listed companies in New Zealand, nor worker salaries," Roberts said.

Even during the Global Financial Crisis, chief executive salaries rose.

"It is therefore somewhat misleading to say that CEO salaries are a barometer for the rises and falls in fortune of the business world and of New Zealand's economy," Roberts said.

"While the rise is often attributed to incentives paid in a buoyant market, this is a simplistic interpretation."

The highest-paid executive of a listed New Zealand company this year was Fonterra's Theo Spierings, who received an $8.32 million salary package. This amounted to an annual increase of 78.5 per cent.