GuerdonNews® Volume 8 Number 6

July 2012

Dear [FIRSTNAME],

Welcome to the July 2012 issue of GuerdonNews®

In this issue we:

• Are pleased that the government has given companies more time to cope with living away from home allowance tax changes
• Confirm that the UK government really is going to require a binding vote on executive pay
• Provide due warning that APRA will likely come knocking to improve banker pay compliance
• Inform directors that they are now liable for their companies' missed Pay As You Go and superannuation guarantee payments
• Describe how the US is tackling board compensation advice independence and disclosure
• Note the effective date for chairman proxy remuneration vote legislative amendments

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.

Australian LAFH tax change deadline extended to 1 October 2012

But annoying uncertainties remain

The Government has taken the decision to defer the start date of the reforms from 1 July 2012 to 1 October 2012.

The government has held two extensive consultation processes in relation to these reforms. A key issue emphasized in submissions was the time needed to reprogram payroll systems to cope with the changes. The government has also made a number of technical changes to the amendments in response to feedback on the exposure draft of the legislation.

There still remain annoying uncertainties in the draft legislation that will go before parliament when it resumes in August.

FSB reports on banker pay implementation across countries

Australia probably rates an A-

The Financial Stability Board (FSB) set the global standards for banker pay with its Principles and Standards on Sound Compensation Practices (“P&S”).

Australia's self evaluation of its P&S implementation standards may have slipped since FSB's first assessment.

Australia’s APRA believes it needs to focus on disclosure standards for material risk takers (MRTs), on-site regulatory review and supervision, and more specific performance measurement for incentives incorporating risk management.

UK to require binding votes on future executive pay policy, including exit payments

The UK is to introduce a binding shareholder vote on executive remuneration

In contrast to Australian law, the UK law will require UK listed companies to disclose future remuneration policy.

To encourage companies to devise a policy for the long-term, the vote will take place annually unless companies choose to leave their pay policy unchanged. In these cases the vote will be required at a minimum every 3 years. Companies will not be able to make payments outside the scope of the approved pay policy.

Directors personally liable for unpaid SG and PAYG amounts

The Tax Laws Amendment (2012 Measures No.2) Bill 2012 has been approved by the Parliament

On 27 June 2012, Parliament approved legislation that makes directors liable for missed company Pay As You Go (PAYG) and superannuation guarantee (SG) payments.

The Tax Laws Amendment (2012 Measures No.2) Bill 2012 aims to strengthen directors’ obligations to ensure their company complies with its existing PAYG withholding and SG requirements.

US SEC Issues Compensation Consultant Rules

The SEC announced new rules governing the use of compensation advisers and the independence and role of the board compensation committee on 20 June 2012.

It is possible that the new listing standards could be in place in time for the 2013 proxy season.

The provisions fall under under Section 952 of Dodd-Frank. The rules cover issues related to compensation committee member independence, and compensation adviser independence, appointment, compensation, retention and oversight.

Corporations Act amendment received Royal Assent

The legislation allows the AGM chair to vote undirected proxies on the remuneration report resolution

Royal Assent has been received for the bill to amend the Corporations Act to make it clear that the chairman of a listed company AGM is able to vote undirected proxies in the non-binding vote on the remuneration report where the shareholder provides express authorisation for the chairman to exercise the proxy.

The bill is in force from 28 June 2012.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 2 companies:

CSR LTD, SINGAPORE TELECOMMUNICATIONS 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

“ASA up in arms over pay proxies", Michael Bennet, The Australian, 20 June 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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