GuerdonNews® Volume 10 Number 9

October 2014


Welcome to GuerdonNews®

In this October 2014 issue we:

• Investigate the relationship between CEO tenure and pay
• Summarise ACSI’s annual Australian CEO pay review findings
• Suggest a checklist to enable chairmen to respond to stakeholder board renewal queries
• Flag UK corporate governance code changes with potential to impact Australian standards
• Note that the IMF's global stability report suggests more bank board independence from management is better for risk management

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

Is CEO remuneration really going down?

It may depend how shiny the pants are from sitting in the chair a long time

We investigate the overall relationship between tenure and fixed remuneration for Chief Executive Officers (CEOs) of ASX 50 companies and find out whether increased experience in the top job matters.

ACSI finds lower Australian CEO remuneration in FY13

And a trend to lower termination payments

For FY13, as for prior years, The Australian Council of Superannuation Investors (ACSI) commissioned proxy adviser Ownership Matters to review CEO pay in ASX 200 companies. Read our summary of findings here.

Revised UK Corporate Governance Code

Some of the changes may find their way to Australian standards

The UK Financial Reporting Council (FRC) has released an updated version of the UK Corporate Governance Code (the Code). Like the ASX Corporate Governance Council Principles and Guidelines, the Code operates on the 'comply or explain' principle.

The prospect of the changes to the UK Code being followed in Australia suggests ASX listed company directors should review them and be prepared for possible change.

Board renewal and engagement

A checklist for the board chairman

Does your board have any "red flags" to look out for? Indications so far this Australian proxy season (similar to recent UK experience) are that investors may be more inclined to oppose the election of directors to boards than in prior years.

Investors and proxy advisers consider the composition, skill set and experience of boards to inform their director election decisions. This checklist suggests ways to respond to investor concerns regarding board renewal.

Latest IMF proposals for banker pay

The IMF’s latest Global Stability Financial Report

The IMF’s latest Global Stability Financial Report published on 1 October 2014 focuses on excessive risk taking by banks and lapses in the regulatory framework that failed to prevent such risk taking as contributors to the global financial crisis. However, while the level of banker pay does not seem a factor, the background of the top bankers, and the independence of the board, are relevant.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 37 companies:

Crown Resorts Ltd, Echo Entertainment Group Ltd, ERM Power Ltd, Energy World Corporation Ltd, Fleetwood Corp Ltd, Greencross Ltd, Harvey Norman Holdings Ltd, iiNET Ltd, Karoon Gas Australia Ltd, Kingsgate Consolidated Ltd, Lend Lease Group Ltd, Lynas Corporation Ltd, MACA Ltd, Medusa Mining Ltd, Mermaid Marine Australia Ltd, Myer Holdings Ltd, Newsat Ltd, Orocobre Ltd, Orotongroup Ltd, Papillon Resources Ltd, Ridley Corporation Ltd, Regis Resources Ltd, Resolute Mining Ltd, Sundance Resources Ltd, Sandfire Resources NL Ltd, Silex Systems Ltd, Syrah Resources Ltd, Tabcorp Hldgs Ltd, Transurban Group NPV Ltd, TFS Corporation Ltd, Troy Resources Ltd, Transfield Services Ltd, UXC Ltd, Village Roadshow Ltd, Virtus Health Ltd, Wesfarmers Ltd and Woolworths 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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  Copyright © 2014 Guerdon Associates

ISSN 1834-8300