Wesfarmers’ new CEO could be paid as much as $3 million less than incumbent Richard Goyder when he steps into the top job in November.
The company yesterday reveals details of Rob Scott’s new contract which shows that he will receive a fixed salary of $2.5 million compared to the long-serving Mr Goyder’s $3.5 million.
His total target remuneration including incentives has been set at $7.5 million, almost 30% less than the $10.5 million for Mr Goyder.
But given that his salary represents his first deal in the new job, for which he is untried, and Mr Goyder is in the final year of his 12 year long reign, the difference isn’t all that surprising.
"We recognise changes in the market that have seen downward pressure on fixed pay levels for CEOs and reductions in overall reward opportunities," Wesfarmers chairman Michael Chaney said on Monday.
"The board and Mr Scott have discussed and recognised the expectations of Wesfarmers’ many stakeholders regarding the remuneration levels of senior executives and believe that this package and those of other senior executives in the group are appropriate and in line with contemporary market practice of peers."
Mr Scott has also started reshaping the company’s executive leadership in preparation for his ascension to the top role later in the year. Long time chief financial officer Terry Bowen will step down later this year to pursue opportunities elsewhere, leaving Anthony Gianotti – currently deputy managing director of Wesfarmers’ industrials division – to take the role.
Bowen replaced former CFO, Gee Tilbrook in 2009.
David Baxby will take over the industrials division in August, while Bunnings Australia and New Zealand managing director Michael Schneider has been promoted to lead the hardware chain worldwide in what is the most important operational role in the company after being CEO of Coles.
Guy Rosso remains in charge of department stores – the solid performing Kmart and the struggling Target, while John Durkan remains as CEO of Coles.
Wesfarmers shares eased 0.1% to $42.55.
