Welcome to the November 2010 issue of GuerdonNews®

In this Melbourne Cup Day issue we:

• Describe research on the implications of publicising executive pay

• Describe some of the findings in global bank supervisors' review of banker pay

• Summarise the Australian Council of Superannuation Investors' research on board effectiveness and performance

• Suggest that an ATO ruling's logic is inconsistent with an employee share option's tax treatment

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 impact of publicising executive pay

Numerous submissions to the executive pay enquiry by Australia’s Productivity Commission bemoaned the publication of executive pay levels, claiming, among other things, that it contributed to the ratcheting up of executive pay.

The Commission, in the end, concluded that there was no evidence for this. Others, not game enough perhaps to make a formal submission to the Commission, believe that executive pay publication just causes anger and envy on the part of those who are not so well paid, and thus contributes to regulatory intervention to curb inequality, regardless of the fact (supported by the Productivity Commission) that the levels of executive pay are largely the result of market forces, and the consequence of a market based meritocracy.

The more they understand the more bank supervisors don’t like – their take on banker pay

The good news is that banking supervisors around the world have vastly increased their knowledge and understanding of risk and remuneration practices.

The bad news is… banking supervisors around the world have vastly increased their knowledge and understanding of risk and remuneration practices.

We pick some highlights from global banking supervisors' review of banker pay practices.

ACSI releases board effectiveness and performance research

The Australian Council of Superannuation Investors (ACSI) represents about 25% of institutional investment in Australia, and provides a range of services to its industry superannuation fund constituents.

One of these is commissioning new research. In this article we summarise findings on board evaluation effectiveness.

ATO ruling logic appears inconsistent with options tax treatment

A recent ATO tax ruling confirms the income tax, PAYG withholding and fringe benefits tax treatment associated with the operation of employee benefits trusts.

According to the ruling, an employee does not derive ordinary or statutory income from the provision of personal services until the income either has been received by them, or is applied or dealt with on behalf of, or as directed by, the employee. An employee will not derive an amount of salary or wages or bonus income if that employee acquires only a right to receive the salary or wages or bonus income. This is interesting in so far as this same principle has not been applied to the taxation of share options.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 73 companies:

Acrux Ltd, Ampella Mining Ltd, Antares Energy Limited, Aquarius Platinum Limited, Aquila Resources, ASG Group Ltd, Aurora Oil & Gas Ltd, Ausdrill Ltd, Austin Engineering Limited, Avoca Resources Ltd, AWE Ltd, Bluescope Steel Ltd, Bow Energy Ltd, Cabcharge Australia Ltd, Cape Lambert Resources Limited, Catalpa Resources Ltd, Ceramic Fuel Cells Ltd, Charter Hall Retail REIT, Citadel Resource Group Limited, Coalspur Mines Ltd, Cudeco Limited, David Jones Ltd, Discovery Metals Ltd, Dominion Mining Ltd, Fleetwood Corp Ltd, Flinders Mines Limited, Geodynamics Ltd, Giralia Resources NL, Grange Resources Ltd, Gryphon Minerals Ltd, Gunns Ltd, Infigen Energy, IOOF Hldgs Ltd, Kingsgate Consolidated Ltd, Lend Lease Group, Linc Energy, Lynas Corporation Limited, Macmahon Holdings Ltd, Mantra Resources Limited, McMillan Shakespeare Limited, McPhersons Ltd, MEO Australia Limited, Miclyn Express Offshore Pte Ltd, Mineral Resources, Mount Gibson Iron, Navitas Limited, Neptune Marine Services Limited, Nufarm Limited, OneSteel Ltd, Panoramic Resources Limited, Perseus Mining Limited, Premier Investments Ltd, Ramsay Health Care Ltd, REA Group Ltd, Regis Resources Ltd, RHG Ltd, Sandfire Resources NL, Saracen Mineral Holdings Ltd, Sedgman Ltd, Servcorp Ltd, Silex Systems Ltd, Sims Metal Management Ltd, Spotless Group Ltd, St Barbara Limited, Suncorp-Metway Ltd, Sundance Resources Limited, Telstra Corp Ltd, TPG Telecom Ltd, Troy Resources NL, Unilife Corporation, Virgin Blue Hldgs Ltd, West Australian Newspapers Ltd, Whitehaven Coal Ltd

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

“The shifting tides of executive pay”, Janine Mace, Company Director, October 2010, pp. 28-31

“Return of the executive mega-bonus”, Nick Gardner, Daily Telegraph, 17 October 2010