GuerdonNews® Volume 8 Number 2

March 2012

Dear [FIRSTNAME],

Welcome to the March 2012 issue of GuerdonNews®

In this issue we:

• Remind you of the additional executive pay compliance requirements announced by the Australian government on 21 February 2012
• Warn that ASIC is again looking over directors’ shoulders to enforce compliance with the law on remuneration reporting and voting
• Congratulate Remuneration Forum panellists and other participants on the insight provided in ensuring stakeholder support for executive remuneration practices
• Provide evidence that remuneration report voting does have a positive impact on remuneration practices
• Report on an APRA speech emphasising board and management roles in complying with APRA pay regulations
• Alert you that companies will have new superannuation pay slip obligations arising from new legislation before parliament with effect in 4 months
• Provide examples of European executive pay requirements
• Advise of a forthcoming change of address for our Sydney office

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 since our last newsletter.

Just in case you missed our special alert

More Australian government legislation on executive remuneration

Exactly eight months after the Australian government last legislated on executive pay, it has announced further legislative changes.

The then Parliamentary Secretary to the Treasurer, David Bradbury, announced the government changes on the 21 February. (Interestingly, he was sworn in yesterday as Assistant Treasurer and Minister Assisting for Deregulation - which makes us wonder if his new job will mean he has to undo what he did in his old job.)

Additional disclosures will be required on:

• Clawback;
• Remuneration governance;
• Termination and post termination payments and entitlements;
• Dividends received on unvested shares; and
• For each key management personnel, crystallised past pay, present pay and future pay

Impact of 2 strikes law strikes home!

The Remuneration Forum has been a valuable learning experience

Thank you to the directors, institutional investors, regulators and company management who attended our 6th annual Remuneration Forum and contributed so much to its success.

The Forum was sponsored by Guerdon Associates with the proxy adviser CGI Glass Lewis, and held yesterday afternoon in Sydney.

Among other things, a lively discussion discovered:

• That negative votes are not always about executive pay
• There are ways for boards to discover who is lodging votes, which is an essential step prior to engaging on pay governance policies
• Why negative votes on remuneration reports were less than in the past
• Negative vote outcomes do not necessarily reflect a poor governance culture, but rather a learning process
• What fund managers are seeking in regard to executive pay frameworks and disclosure

A complete summary will appear on our website in coming days.

ASIC sends another warning to companies for improved remuneration reports

And says that companies must take steps to control who votes

On Sadie Hawkins Day (29 February 2012), ASIC again called on companies to improve the disclosure of their remuneration arrangements for directors and executives.

The call for improvement follows a review of 50 remuneration reports - drawn from 300 of Australia’s biggest companies - for the year ended 30 June 2011.

ASIC also surveyed how listed companies have managed the new voting exclusions that prohibit key management personnel (KMP) and their closely related parties voting on the resolution to adopt the remuneration report.

Despite the pain, it is worth it!

Latest research provides robust evidence that remuneration report voting does improve pay practices

The evidence from the "say on pay" experience has recently been reviewed.

The research indicates that remuneration report voting has made a difference in the extent that boards respond to external views of pay policies, and that there is less pay for poor performance.

A European perspective on executive pay laws and guidelines

Does anyone do it better?

The Australian government and other governance stakeholders have introduced a plethora of additional executive pay law and governance guideline changes in the wake of the GFC. And the Labor government has recently announced more.

In this article we take a brief look at a few European developments.

Revised superannuation contributions reporting requirements from 1 July 2012

Plus tax creep on employees trying to retire

The government is amending the Superannuation Industry (Supervision) Act 1993 and regulations to require most employers, when reporting superannuation entitlements on payslips, to state the day by which the employer intends to make the contribution, in addition to the amount of the contribution.

Moving up in the world

Guerdon Associates’ Sydney office on the move

Our Sydney office is relocating to larger premises. But not far - same building, but a higher floor.

The new address will be Level 8, 3 Spring Street, Sydney, NSW, 2000. The main telephone number of +61 2 9270 2900, and staff extensions, will remain unchanged, as will the fax number.

The move will be consummated on the afternoon and evening of Friday 16 March. It is likely that our Sydney phone and email server systems will be temporarily unavailable during this time. If a matter is urgent, our Melbourne office will be unaffected, and can be contacted on +61 3 8319 4005.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 16 companies:

WOODSIDE PETROLEUM LIMITED, PAN AUSTRALIAN RESOURCES LIMITED, COCA-COLA AMATIL LIMITED, OIL SEARCH LIMITED, QBE INSURANCE GROUP LIMITED, SANTOS LIMITED. MIRABELA NICKEL LIMITED , ADELAIDE BRIGHTON LIMITED, AUSENCO LIMITED , ROC OIL COMPANY LIMITED, OZ Minerals Limited, IRESS MARKET TECHNOLOGY LIMITED, INTREPID MINES LIMITED, CALTEX AUSTRALIA LIMITED, BOART LONGYEAR LIMITED , and AUSTAR UNITED COMMUNICATIONS 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

“Boards weigh executive bonus clawback clauses”, Andrew White, The Australian Financial Review, 13 February 2012, p.3

“Labor reins in executive bonuses”, Patrick Durkin, The Australian Financial review, 22 February 2012, p.1 and p. 8

“Directors’ pay edged up 5.1 per cent in 2011”, The Boardroom Report, Australian Institute of Company Directors, Volume 10, Issue 3, 22 February 2012, p.2

“Pay laws back in the ring”, Guerdon Associates, Business Spectator, 22 February 2012

Disclaimer

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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  Copyright © 2012 Guerdon Associates

ISSN 1834-8300

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