Welcome to the February 2016 issue of GuerdonNews^®

In our first issue of 2016, we:

• Update you on some of the upcoming governance and remuneration forum panels

• Analyse the latest CEO pay data to summarise increases and trends

• Forecast calendar 2016 for director and executive pay as well as board effectiveness changes

• Note that Australia has a relatively high CEO turnover rate

• Discuss the European Banking Authority's new bonus cap rules and their implications

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.

Governance and Remuneration Forum update

Invitations have been sent to directors, institutional investors and executives for the Forums in Sydney and Perth.

The forum will include:

• A panel on the extent that investor governance guidelines help or hinder agility and innovation

• A panel on the extent that boards are expected to exercise oversight on company culture

• A debate between a founder/entrepreneur and an institutional investor on the usefulness or otherwise of governance guidelines

Read more.

2014 CEO pay – a stronger link with performance

Guerdon Associates reviewed the pay variation of CEOs who managed to survive in the same position for the two years ending in 2015.

There are so many ways that the data can be diced and sliced, but the upshot is:

• Larger companies provided smaller increases

• Smaller companies provided larger increases

• Larger companies have executives focus more on long term performance

• Smaller companies have executives focus on shorter term performance

• Better performing companies provided the largest pay increases

• Lower performing companies provided the largest pay decreases

If your CEO feels poorer, he/she is not alone. Only a little more than half of CEOs received an increase in total remuneration.

Read more.

The outlook and issues for Australian director and executive pay and board effectiveness for 2016

2016 will be especially interesting for board nomination & remuneration committees and for institutional investors

As the remuneration adviser to more ASX300 boards than any other independent consulting firm, we are often asked our opinion on how executive remuneration and board governance is going to change. This article dusts off our crystal ball and presents our outlook for director and executive pay, and also for board effectiveness, for calendar 2016.

Read more.

Australian CEO turnover

Note a safe country to get that last promotion

A recently published a report examined CEO succession trends at the 2,500 largest public companies in the world. It concluded that Australia had 35% more CEO turnover than the global average.  Differences in governance practice amongst countries may be the most likely factor for differences in CEO turnover.

Read more.

Europe’s bonus cap rules for bankers confirmed

EBA rules are highly prescriptive

The European Banking Authority confirmed the rules to apply capping banker incentives in late December. The rules set deferral amounts to either 40% or 60% of the incentive. In addition, incentives are limited to 100% of fixed pay, unless there is specific shareholder approval for more. The EBA has relented to permit the valuation of LTIs for cap purposes to be at grant date fair value, rather than value at vesting.

Read more.

Latest GuerdonData^® Updates

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

Broadspectrum Limited, Costa Group Holdings Limited, Pacific Current Group Limited, The Star Entertainment Group Limited, Vicinity Centres Stapled 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^®.

Assess how easily you can find out director and executive pay information by viewing our 6 minute demo, for more information click HERE.

Guerdon Associates in the news

“Big bonuses breed toxic culture”, Misa Han, Australian Financial Review, 20 January 2016, p. 8

“The only way is up”, Domini Stuart, Company Director, Volume 32, Issue, oq, February 2016, pp. 58-59

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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.