Welcome to the April 2011 issue of GuerdonNews®
In this issue we:
• Provide a checklist for board remuneration committees that need to exert more control
• Note an interesting amendment being proposed to the two strikes and related executive remuneration legislation
• Provide a summary of our submission to Treasury on the executive pay clawback paper
• Have a response from ASIC of the likely evidence the government is using for its clawback policy
• Provide a video of a significant institutional investor's executive remuneration observations
• Summarise the issues agreed on at the Remuneration Forum 2011
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.
Asserting control – a checklist for the board remuneration committee to avoid two strikes
Additional government regulation is forcing boards to be more active in executive pay to the extent that the board is taking on some of the functions they once delegated to management. There is no choice.
In particular, the two strikes law will require that the board somehow makes room for managing pay, alongside more material matters.
In this article, we focus on the three basic areas that directors need to address for success.
No two strikes law just yet – leaving time to panic later
The government – with cross-party support - decided that giving priority to politicians’ remuneration legislation was more important
The two strikes and related executive remuneration legislation has been held up in the House of Representatives. It had to give way to politicians voting on their own pay. But during the debate, there was an interesting amendment proposed.
Clawback submission made to Treasury
Guerdon Associates, as well as many others, made submissions to Treasury on the clawback paper released in December.
A summary of our main points appears in this article.
Stop press - ASIC evidence of material misstatement in accounts for remuneration clawback
The Treasury paper said that financial misstatement was “not uncommon” based on ASIC information.
Now ASIC has suggested what was the likely source for this conclusioin.
One of the world’s largest institutional investors speaks on executive remuneration
BlackRock manages over US$3.7 trillion of funds globally. It is probably the most active of the “mega” institutional fund managers on governance matters.
Ms. Michelle Edkins, BlackRock’s Managing Director and Head of Corporate Governance Europe talked about executive remuneration in Europe during her presentation at the Australian Remuneration Forum on 21 March 2011. See the video here.
Remuneration Forum 2011: lots of common ground but also plenty of problems - so let’s just get on with it!
The annual CGI Glass Lewis and Guerdon Associates sponsored remuneration forum brought together over 100 directors, superannuation fund and institutional investors, regulators, and management.
It might be expected, therefore, that views would be split on the merits of the government’s latest executive remuneration ‘reforms’.
Not so. There was consensus on almost all issues.
Latest GuerdonData® Updates
Updates to GuerdonData® include disclosures from the following 21 companies:
Australand Property Group, AMP Limited, APN News & Media Limited, Caltex Australia Limited, Energy Resources Of Australia Limited, General Property Trust, Henderson Group Plc, Indophil Resources Nl Macquarie Airports, Nido Petroleum Limited, Rio Tinto Limited, Santos Limited, Westfield Group, Coca-Cola Amatil Limited, Oil Search Limited, Ausenco Limited , Aristocrat Leisure Limited, Alumina Limited, IRESS Market Technology Limited, Northern Iron Limited, STW Communications Group 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
"If you want advice, don't ask advisers", Ian McIlwraith, Sydney Morning Herald and also Brisbane Courier Mail, 01 March 2011
“Caltex Australia Limited; 2011 AGM and 2010 Annual Review and 2010 Annual Report”, ASX ComNews, 18 March 2011
"Checklist for dealing with new pay laws", Boardroom Report, Volume 9, Issue 5, 23 March 2011, p. 4
“Directors slam bonus payback proposal”, Patrick Durkin, Australian Financial Review, 30 March 2011, p. 3
“Directors slam cash claw-back plan”, Clancy Yeates, Brisbane Times, as well as the Sydney Morning Herald, 31 March, 2011