GuerdonNews® Volume 10 Number 7

August 2014


Welcome to GuerdonNews®

In this August 2014 issue we:

• Report on the Financial Systems Inquiry's interim views on governance and remuneration regulation
• Note the cost of Board discretion when applied to relative TSR hurdled long-term incentives
• Observe what works for new getting board members contributing quickly
• Suggest that ASX Listing Rule 10.17 may result in less director fee headroom
• Announce a Guerdon Associates - ISS Symposium that will provide a heads up on ISS' new proxy guidelines

We conclude with the latest on executive and director remuneration disclosure updates available on the GuerdonData® on-line database.

Financial System Inquiry Interim Report

Observations on corporate governance

The Financial System Inquiry, chaired by Mr David Murray, released its interim report on 15 July 2014. It included observations regarding corporate governance and remuneration.

The Cost of Board Discretion

Should companies wear higher relative TSR LTI expense?

Would your Board permit vesting of LTI grants based on relative total shareholder return (TSR) in the event that the absolute TSR was negative for the performance period? If you answered “no”, read on, because you may reduce an expense and increase your NPAT.

How to get up to speed quickly when joining a new board

Tips for new board members

In the course of our director evaluation and board renewal work with boards we frequently encounter directors wrestling with the extent that they can add value in their early days on a board. Based on this experience, and comparisons across boards, this article suggests how newish directors can facilitate their induction.

ASX Listing Rules amended to capture more within existing director fee pool limit

Make sure you have enough headroom

The ASX has revised Listing Rule 10.17 and introduced new Listing Rules 10.17A and 10.17B to clarify the rules relating to the payment of “directors’ fees”, with effect from 1 July 2014.

While there has been no change to the basic requirement of Listing Rule 10.17 that an entity must not increase the total aggregate amount of directors’ fees payable to all of its non-executive directors without the approval of holders of its ordinary securities, there has been a change as to what should be counted in the fee pool.

Guerdon Associates–ISS Symposium to reveal new proxy guidelines

Available to institutional investors and directors

ISS will present its new guidelines “hot off the press”. These are the guidelines that will be in effect when ISS reviews company remuneration and governance in the 2014 reporting season.

The symposium will take place 20 August 2014, from 8:00 to 11:00am, at Harbour 220, 131 Macquarie Street, Sydney Australia, and is open to ASX listed company directors and institutional investors.

Latest GuerdonData® Updates

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

GUD Holdings Ltd and Navitas 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®.


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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