GuerdonNews® Volume 10 Number 10

November 2014


Welcome to GuerdonNews®

In this Melbourne Cup Day November 2014 issue we:

• Summarise the Australian government's proposed changes to employee equity taxation
• Review the new ASIC Class Orders providing relief for employee incentive schemes
• Provide a remuneration committee checklist for equity grants

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.

The Australian Government’s long anticipated changes to employee equity plan taxation

Back to the future as the 2009 tax impositions are unwound

On 14 October the Australian Government announced its long-anticipated changes to employee equity plan taxation. This formed a major part of its response to the National Industry Innovation and Competitiveness Agenda.

Not only do the changes once again permit the deferral of tax on options to the time of exercise, rather than grant, but they also provide additional tax incentives for start ups. While companies need to wait for the detail before taking any action, the implications for director, executive and employee reward could be significant.

New and improved ASIC relief for employee incentive schemes

More good news on the employee share scheme front!

Following the federal government's announcement that it will improve the tax treatment of benefits received under employee share schemes, ASIC has released new Class Orders to give companies relief from the various Corporations Act requirements that would otherwise apply to offers made under employee share schemes.

Equity grants – a Remuneration Committee checklist

We start with some of the essentials

It starts out simply enough. If an executive performs well he/she is paid shares. These are held for "skin in the game", to ensure alignment with shareholders.

Unfortunately, it does not stay simple. The Corporations Act, ASIC class orders, taxation, ASX listing rules, proxy adviser guidelines, investor requirements, accounting expenses, executive expectations, documentation, market practices, Monte Carlo simulations, and shareholder disclosures and approval are a lot to take in and absorb.

We start with a board remuneration committee checklist for the essentials regarding what to grant, how many to grant and making sure the value is not too little or too large, but just right.

Guerdon Associates in the news

“Actively managing board renewal”, Boardroom Report, Volume 12, Issue 20, 17 October 2014

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 4 companies:

Australian Pharmaceutical Industries, Bank of Queensland, Ten Network Holdings and TPG Telecommunications.

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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