GuerdonNews® Volume 10 Number 11

December 2014


Welcome to GuerdonNews®

We have a bumper issue to keep you occupied over the holidays!

In our final issue for 2014, we:
• Summarise our annual analysis of ASX 300 CEO executive pay increases
• Provide an update of Australian proxy advisor changes
• Examine CEO pay mix trends
• Alert you to proposed changes to the share based payments accounting standards
• Suggest guidelines for what is and what is not good board disclosure
• Summarise proposed Government changes to remuneration disclosure regulations
• Suggest you save the date for the 2015 Remuneration and Governance Forums
• Describe changes to New Zealand governance principles

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

We look forward to reporting board governance and executive remuneration news to you again in 2015, with our first monthly issue to be delivered on the first Tuesday in February. In the interim we will as usual be working for our clients throughout January. 

From all of us in Guerdon Associates, best wishes for a safe, happy and prosperous New Year.

Australian CEO pay increases and trends

Forty per cent of CEOs received no increase in total remuneration.

Overall trends suggest that increases in fixed pay and short-term incentives (STIs) are modest but long-term incentives (LTIs) are increasing in value.

At 3.3%, the median increase in fixed pay is exactly the same as the increase we reported for 2013.

Proxy firm developments 2014

Staffing changes impacting governance in a $trillion of superannuation assets

It has been an eventful year for our trusty proxy advisers. New appointments, staff turnover, and the promise of new services to issuers as well as investors.

Save the date – 2015 Remuneration and Governance Forums

Mark your calendars!

The 2015 Remuneration and Governance Forums for board directors and institutional investors are scheduled for the afternoon of 5 March in Melbourne and the morning of 9 March in Perth.

2014 CEO pay – changes in pay mix

More at risk, and longer term

Governance pressures continue to have an impact on CEO pay mixes. Generally speaking, there is more at risk, and there is more long term value provided.

Board Performance Evaluation

How to best meet disclosure requirements

The ASX Corporate Governance Council (CGC) has raised the bar in relation to disclosures relating to Board Performance Reviews.

In the Council’s 2010 Corporate Governance Principles and Recommendations, there was a requirement under Recommendation 2.5 to "…disclose the process for evaluating the performance of the board, its committees and individual directors." In addition, the commentary under this recommendation called for regular board performance reviews against appropriate measures.

Changes proposed to accounting standard for share based payments

Clarification in regard to cash liability treated share based payments are welcome

The Australian Accounting Standards Board is seeking comment on proposed changes to AASB 2 'Share-based Payment'. The proposed changes are consistent with changes the International Accounting Standards Board (IASB) is proposing to make to IFRS 2 Share-based Payment.

New Zealand proposes changes to its listed company governance principles

The New Zealand Financial Markets Authority (FMA) has proposed changes to its governance principles, unchanged since 2004

The principles apply to a broader set of companies than the ASX Corporate Governance Council Principles, and include listed issuers, other issuers, state-owned enterprises, community trusts, public sector entities and other companies.

Australian government proposes more amendments to remuneration disclosure regulations

A fix to fix prior fixes

Australian Government improves remuneration disclosure regulations to fix problems with prior amendments. On balance the clean-up in wording, and consistency in treatment of equity instruments makes sense. From some board remuneration committees, the changes mean that equity grants tables should have better quality, consistent information.

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 7 companies:

Australia And New Zealand Banking Group Limited, Duluxgroup Limited, Graincorp Limited, National Australia Bank Limited, Orica Limited, Technology One Limited and Westpac Banking Corporation Limited.

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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