Welcome to the September 2010 issue of GuerdonNews®
In this issue we:
• Describe new ASX listing rules impacting Key Management Personnel share trading
• Suggest a board remuneration committee checklist for relative TSR testing
• Describe prescriptive UK FSA remuneration code amendments, with implications for Australia
• Summarise the ATO’s clarification of share unit and share appreciation right taxation
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.
New ASX listing rules require a Key Management Personnel trading policy
Key Management Personnel (KMP) of ASX listed companies will be impacted by new listing rules governing the adoption, content and disclosure of company trading policies.
KMP here has the same meaning as KMP used for remuneration reports, and includes directors and senior management. We address several implications for remuneration policy and frameworks arising from the new rules in this article.
TSR testing – a board remuneration committee checklist
This past 18 months we have reviewed more long-term incentive plan TSR test outcomes and methods than we would have expected.
The increased interest in having an external provider review TSR test methods coincides with unusually poor results during the GFC.
UK FSA’s amendments to the Remuneration Code presents opportunities for Australia
A consultation paper published by the UK’s Financial Services Authority (FSA) on 29 July 2010 proposes changes to its Remuneration Code that present opportunities for asset managers in Australia, Switzerland, Canada and the US.
Made in response to European Union requirements, the proposals include a significant increase in the coverage of the code from approximately 27 of the largest banks, building societies and broker-dealers to over 2,500 FSA-authorised banks, building societies, asset managers (including hedge funds!) and some firms engaged in corporate finance, venture capital, the provision of financial advice and stockbrokers.
The prescriptive nature of the code will not assist London maintain its attractiveness for financial services talent.
Australian Tax Office provides clarity for share unit and share appreciation right taxation
With unvested equity taxed at cessation of employment and share options taxed on vesting rather than exercise, more companies are implementing share unit and share appreciation right plans.
However, while there has been a trend to these pay vehicles since new share scheme taxation was introduced in 2009, there remained some uncertainty as to their tax treatment. The ATO has now clarified the Fringe Benefits Tax status of such interests.
Latest GuerdonData® Updates
Updates to GuerdonData® include disclosures from the following 32 companies:
Abacus Property Group, Alesco Corporation Limited, ASX Limited, Austal Limited, Biota Holdings Limited, Bradken Limited, Centro Properties Group, Centro Retail Group, Challenger Financial Services Group Limited, Emeco Holdings Limited, Flexigroup Limited, Goodman Fielder Limited, Hastie Group Limited, IMF (Australia) Ltd, Macarthur Coal Limited, Medusa Mining Limited, Mirvac Group, Monadelphous Group Limited, Oakton Limited, Primary Health Care Limited, Prime Infrastructure Group, Primeag Australia Limited, Qantas Airways Limited, Riversdale Mining Limited, Salmat Limited, SMS Management & Technology Limited, Stockland, Telecom Corporation Of New Zealand Limited, The Reject Shop Limited, United Group Limited, Watpac Limited, Wotif.Com Holdings 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
“Business leaders fight pay reforms”, Patrick Durkin, Australian Financial Review, 17 August 2010, p.3
“Executive pay changes not so simple”, Katie Walsh, Australian Financial Review, 18 August 2010, p. 9
“Shake-up for proxy advice industry”, Patrick Durkin, Australian Financial Review, 24 August 2010, p. 3
“How much is too much? Two rules to help you”, Ian McIlwraith, Sydney Morning Herald Business Day, 28 August 2010
“Little support for firm rules on executive pay”, Martin Lawrence, WA Business News, 2 September 2010
“Boards rejig executive pay deals”, Annabel Hepworth, Damon Kitney, and Tracy Lee, The Australian, 6 September 2010
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.
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