Welcome to Guerdon Associates’ May2007 newsletter.
In this month’s newsletter we provide an update on non-executive chairman pay, provide some practical guidance on how remuneration committees oversee option and share grants, look at personal use of company aircraft, put to bed any question that executive options are “given away”, provide evidence that retail investors may need a PhD to read remuneration disclosures, and report that Canada is coming in from the cold on pay disclosure requirements.
We conclude with the latest executive and director remuneration disclosure updates available on the GuerdonData® on line database, as well as the month's news media featuring Guerdon Associates.
Non-Executive Chairman Remuneration Update
Guerdon Associates’ annual review of non-executive chairman pay confirmed that company size, while not everything, explained a lot.
Guerdon Associates extracted data for all non-executive board chairman positions from GuerdonData®. This data comes from Australian ASX 300 companies and is based on 2006 disclosures. We also extracted company financial data from Aspect Huntley as at 12 February 2007.
Practical Guidance For Options and Rights Grant Governance and Process
Given all of the issues surrounding employee share and option grants it behoves board remuneration committees and company management to make sure they have at least certain governance basics in place.
This article suggests a checklist of standard “housekeeping” matters that the board remuneration committee require of management.
Costing personal use of corporate aircraft
The most common method of costing personal use of corporate aircraft in Australia appears to cost the flight as 1st class travel, and adding the appropriate Fringe Benefits Tax (FBT).
This becomes problematic where the aircraft is used for destinations where there is no equivalent commercial comparison.
Contrary to Media Claims, Executive Options Are Not Given Away
There has been criticism that executive share options have been given away too cheaply.
We tested this recently, and the answer is a categorical “no”.
There were many aspects to our analysis. In fact, too many to report here in a newsletter format. However, we can report as to whether boards were indeed giving away too many options and share rights at a discount.
We Don't Speak No English Here – Poor Quality Disclosures Targeted
So far the Australian Securities and Investments Commission (ASIC), has not targeted poor public company remuneration report disclosures.
Recently applied standard tests of written English ability reveal that some remuneration reports require a PhD standard to comprehend what they are saying.
Canada proposes executive compensation disclosure reforms
The proposals will essentially provide information similar to Australian and the recently implemented US disclosure requirements.
The Canadian Securities Administrators (CSA) is proposing reforms to executive compensation disclosure requirements that aim to improve the quality of that disclosure. The CSA says that in many areas, they have attempted to articulate requirements in a less prescriptive manner than the US requirements (so, in effect, they should be more like Australia's requirements).
Latest GuerdonData® Updates
This month’s updates to GuerdonData® include disclosures from the following twenty-eight companies:
ABACUS PROPERTY GROUP, ALLIANCE RESOURCES LIMITED, CBH RESOURCES LIMITED, CUDECO LIMITED, CITIGOLD CORPORATION LIMITED, DEEP YELLOW LIMITED, IWL LIMITED, NEXUS ENERGY LIMITED, OAKTON LIMITED, SPECIALTY FASHION GROUP LIMITED, FUNTASTIC LIMITED, COCA-COLA AMATIL LIMITED, MINARA RESOURCES LIMITED, OCEANA GOLD LIMITED, OIL SEARCH LIMITED, ROC OIL COMPANY LIMITED, ARROW ENERGY NL , ANZON AUSTRALIA LIMITED , BECTON PROPERTY GROUP LIMITED , BRAVURA SOLUTIONS LIMITED , EMECO HOLDINGS LIMITED , MURCHISON METALS LTD , SPARK INFRASTRUCTURE GROUP , IRESS MARKET TECHNOLOGY LIMITED, PETSEC ENERGY LIMITED, CALLIDEN GROUP LIMITED, GRD LIMITED, INVOCARE LIMITED
Executive and director remuneration data from all ASX 300 companies on GuerdonData® is available to any subscriber. Visit our website for more information on GuerdonData®.
Assess how easily you can find out director and executive pay information by viewing our 6 minute demo. Click on the “More Info” button below.
Guerdon Associates In The News
“Work and pay: are directors paid enough?”, Domini Stuart, Company Director, Vol 23, No 3, April 2007, pp 17-21
“Pay deal bonus-State CEOs pay with less risk than peers”, Liam Walsh, Brisbane Courier Mail, April 09, 2007, Page 1 & 26 of the Finance section
“Chairman pay and workload”, Michael Robinson, Keeping Good Companies Journal, April 2007, Vol. 59 No. 3, pp 158-159
“Get on board”, Kate Mills, CFO, April 2007, pp. 20-23
The information, analysis and opinion in this e-mail and attachments are
intended to be for informational purposes only. Analyses are based on
information taken from public documents or private surveys, and we do not
represent to its accuracy. Guerdon Associates assumes no liability for the use
or interpretation of information contained herein. This publication is provided
'as is' without warranty of any kind, either expressed or implied, including,
but not limited to, the implied warranties of marketability, fitness for a
particular purpose, or non-infringement of third party rights.
This email was sent to: [EMAILADDRESS]
To manage your membership details including subscriptions
If you would prefer to receive this email newsletter in text format please
If you would like to unsubscribe from this email newsletter please
TELL A FRIEND
Forward this email onto a friend
Your comments and questions are welcome. Send them to