GuerdonNews® Volume 10 Number 6

July 2014


Welcome to GuerdonNews®

In this July 2014 issue we:

• Address institutional investor questions around long term incentive grants
• Investigate the relationship between the vesting of relative TSR hurdled long term incentives and company volatility
• Note the differences between executive and non-executive directors
• Have outgrown our Sydney offices, requiring a move later this month

We conclude with mentions of Guerdon Associates in news media, and the latest on executive and director remuneration disclosure updates available on the GuerdonData® on-line database.

Institutional investors question the basis of LTI grants, and many boards are ill prepared to respond

A checklist for the board remuneration committee

A 10 June 2014 Credit Suisse analyst report has been avidly consumed by major institutional investors during the past few weeks.

It reinforces the suspicions of many investors that some methods for determining the number of share rights etc. to grant to an executive for a specified annual long-term incentive (LTI) remuneration value result in much higher executive pay than has been disclosed.

Volatile companies defy logic in relative TSR hurdled vesting outcomes

Investment advisers will tell that you that, in the long term, higher risk should produce higher return.

This would imply that executives in companies with higher share price volatility should be reaching their relative TSR targets more frequently than their less volatile peers.

However, Guerdon Associates’ study of the S&P/ASX 50 found that the opposite may in fact be true. That is, the value of an investment, or LTI in this case, is not necessarily related to the frequency in which it vests.

Executive or non-executive director? The law decides.

Key points from the recent decision of the Supreme Court of Victoria

A recent court decision describes the legal differences between an executive director and a non-executive director.

Guerdon Associates’ Sydney office is relocating

Move to accommodate growth

Due to continuing growth, please be advised that Guerdon Associates is moving Sydney offices to new premises with effect from Monday the 28th of July 2014.

Main telephone and fax details will remain unchanged. Direct telephone numbers for consultants, analysts and administrative personnel will also remain unchanged. However, our mail server and phone system will be off-line for the morning of 28 July.

Guerdon Associates in the news

“How to judge a director’s character”, Australian Institute of Company Directors, Volume 12 Issue 12 2014

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 5 companies:

CSR Ltd, James Hardie Industries plc, Metcash Ltd, Singapore Telecommunications Ltd and SP AUSNET.

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.


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 © 2014 Guerdon Associates

ISSN 1834-8300