Welcome to the August 2009 issue of GuerdonNews®

In this issue we:

• Summarise the fifth Government share scheme tax announcement and our submission to the Senate’s enquiry

• Suggest you hold the morning of October 19 free to hear from the Productivity Commission’s chairman

• Analyse changes in director workload over the past two years

• Summarise our response to the draft APRA regulation

• Summarise our submission to the Australian Senate Economics Committee on termination pay

• Highlight proposed new US compensation disclosure that may impact Australian requirements

We conclude with the latest on executive and director remuneration disclosure updates available on the GuerdonData® on-line database.

Another government share scheme tax announcement, and Guerdon Associates’ submission to Senate enquiry

A guide to share scheme tax as it stands now

A government press release on share scheme taxes on 24th July 2009 indicated the timeframes for the final round of industry consultations on reforms to the taxation of employee share schemes. The Assistant Treasurer, Senator Nick Sherry, also released the Terms of Reference for the Board of Taxation review component.

Save the date – 19 October 2009 morning briefing from the Productivity Commission on their director and executive pay report

The Australian Productivity Commission will publish their interim report on executive remuneration in late September.

Guerdon Associates is pleased to advise that Mr. Gary Banks, the Commission’s chairman, has agreed to provide a briefing to non executive directors, institutional investors and executives on the Commission’s findings and likely recommendations on Monday, 19 October.

This will be the only opportunity for institutional investors, companies and their boards of directors to freely express opinions and provide feedback to the Commission under Chatham House rules before it lodges its final report with the government in December.

Who wants to be a non-executive director? Our latest research on workload

Attracting experienced and competent NEDs is likely to become more difficult if these trends continue.

The data suggests that boards that have increased their workload have also increased their performance. The implication that directors of poor performing companies have decreased their workload may be counterintuitive, since we might have expected them to meet more often when performance declines.

Our analysis also confirms that:

•Boards and board committees are meeting more often
•Boards are getting bigger
•Demand for independent directors is increasing
•The best performing companies have NEDs who meet more often

Guerdon Associates' response to draft APRA regulation

The latest draft APRA amendments to prudential standards are entirely focused on remuneration.

Guerdon Associates submitted its response to the draft regulation on 22 July 2009. Our submission goes into the draft standards and guidance note in some detail. However, for this article we highlight the parts of our response that try to put remuneration in context as it relates to the global financial crisis, while also summarising some of the issues and implications of the regulation.

Guerdon Associates' submission to Australian Senate Economics Committee on termination pay

Guerdon Associates was invited by the Australian Senate Standing Committee on Economics to make a submission on the amended regulations pertaining to executive termination pay.

Our submission is summarised in this article. Please click "More Info" below.

US disclosure changes may be useful for remuneration committees and Australian Productivity Commission

On July 17, 2009 the USA’s SEC published proposed new requirements for compensation disclosure.

Many of the suggestions will meet various stakeholder concerns if adopted in Australia and, coincidently, reflect several aspects of Guerdon Associates’ submission to the Australian Productivity Commission. Others go beyond what we think may be appropriate for Australia’s shallow market.

In addition, some aspects may provide useful guidelines for remuneration committee consideration, even if they are not disclosed. In particular, guidelines for ascertaining if remuneration practices are aligned with the company's risk appetite.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following company:

Alesco Corporation Limited, Medusa Mining Limited, Metcash 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.