Welcome to the February 2010 issue of GuerdonNews®

And to a year of change

In this issue we:

• Start off the year with our predictions for non-executive director and executive pay for the year ahead

• Provide a checklist of board remuneration committee 2010 planning priorities

• Track non-executive director remuneration movements

• Notify you of a change in date for our annual remuneration forum for non executive directors, institutional investors and executives, and

• Summarise the Productivity Commission’s report on executive pay

We conclude with the latest on executive and director remuneration disclosure updates available on the GuerdonData® on-line database and references to Guerdon Associates in the news media.

The outlook for director and executive pay in 2010 - 2011

This article dusts off our crystal ball and presents our outlook for non-executive director and executive pay for 2010 into 2011.

It will be a very busy time for board remuneration committees

Planning priorities for 2010: A checklist for the board remuneration committee

Regulatory developments and trends in executive remuneration will mean a full agenda for remuneration committees in 2010.

The checklist below may assist remuneration committee members determine their priorities for the year ahead.

Non-Executive Director (NED) 2009 pay increased by 5.5%

The median 2009 change in NED total compensation was 5.54%. This was higher than the 1.5 % median increase in CEO remuneration summarised by us in December.

We analysed the change in non-executive director remuneration from 2008 to 2009 using GuerdonData®.

To validly determine the rate of increase, we identified the 922 NEDs who were in the same role for all of the last two financial years. They are drawn from all industries, with ASX 300 company market capitalisation ranging from $35 million to $145 billion (as at 21 January 2010).

Remuneration forum for directors and institutional investors – the date has changed!

This year's Melbourne program allows more time for questions and discussions from the floor.

To coincide with the government’s response to the Productivity Commission report on executive pay we have had to change the Remuneration Forum’s date to March 29.

Australian Productivity Commission reports on executive pay

On 19 December 2009 the Productivity Commission (PC) delivered its report to the government on director and executive remuneration. The government released the PC’s report to the public on 4 January 2010.

The report’s recommendations have significant implications for executive pay governance structures and processes for listed companies. In particular, it elevates the importance of executive pay governance among board deliberations, adding to increases in non-executive director workload, skill and knowledge requirements, and “professionalisation”.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following companies:

Australian Pharmaceutical Industries Limited, Elders Limited, Graincorp Limited, Incitec Pivot Limited, Lion Selection Limited, Tower Australia Group Limited

Guerdon Associates in the News

“Bonuses For Aust CEOs Despite Financial Crisis”, The Main Report Business Letter, 7 December 2009

“Making it through the teens”, Michael Robinson, Company Director, Vol 25 No 11, December 09 -January 10, pp. 32-34

“Two strikes pay plan likely to be eased”, Patrick Durkin, The Australian Financial Review, 21 December 2009, p.3

“How much is too much for an executive salary?”, Rebecca Urban, The Weekend Australian, 9 January 2010, pp 21

“Remuneration consultants in the spotlight”, Alex Boxsell, Australian Financial Review, 14 January 2010, p. 4