UniSuper investment chief John Pearce is the highest-paid executive among Australia’s industry superannuation funds and one of 10 people to take home a pay packet of more than $1 million.

Pearce was handed $1.73 million for the year to June 30, a 9 per cent increase on 2018. His package included a base salary of $589,744 with a short-term bonus of $1.02 million, according to Investment Magazine’s 2020 pay survey, which has compiled the data from publicly available annual reports.

Now in its sixth year, the survey includes remuneration for non-profit licensed super funds for the financial year ended June 30, 2019. It also includes the country’s largest government funds and the Future Fund, but does not include bank-owned or other for-profit super funds.

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This year’s survey comes just as the prudential regulator plans to introduce pay reforms across the financial services sector in 2021, which revamp bonus structures and defer the bulk of all payouts for up to seven years to ensure that staff do not profit from risky short-term investments.

The chief people officer at UniSuper, Julie Watkins, said it had become clear since the Hayne royal commission that taking a longer-term view on performance measures was required and that if not already built into a remuneration package, a long-term pay incentive could be beneficial.

“We are aware that a deferral period and clawback is likely to apply to some roles,” she said. “We expect to see further governance around incentives, deferrals, financial and non-financial metrics in performance plans. Whether this leads to higher or lower incentives is yet to be determined.”

Watkins confirmed that the $85 billion fund uses Australian benchmark data to remunerate Pearce and said she was “confident” his compensation was appropriately competitive. The data was sourced from banking, funds management, superannuation and insurance.

“Our focus is on ensuring greater retirement outcomes for members and the CIO performance incentive is related to significant influence on fund performance and results,” she added.

UniSuper last year topped Chant West’s best performance list. The balanced fund, which has among the highest allocation to equities among its peers, returned 18.4 per cent in 2019 compared to 14.7 per cent for the industry.

Watkins said metrics in UniSuper’s performance plans also measured long-term investment returns between three to 10 years, which provided a broad view of performance outcomes.

Best paid CIOs & CEOs

The highest paid executives are typically investment chiefs, accounting for seven of the top 10 who earned more than $1 million, the survey showed. After UniSuper’s John Pearce, AustralianSuper’s Mark Delaney, the Future Fund’s Raphael Arndt and First State Super’s Damian Graham are the next three highest-paid CIOs. Delaney received a total remuneration package of $1.63 million while Arndt took home $1.46 million. Graham made fourth place, receiving $1.33 million followed by Commonwealth Superannuation Corporation’s (CSC) Alison Tarditi who was paid $1.27 million.

Other investment heads whose pay hit the $1 million mark included QSuper’s Brad Holzberger, now retired, and Sunsuper’s Ian Patrick.