GuerdonNews® Volume 13 Number 3

April 2017

Dear reader,

 

Welcome to the April 2017 issue of GuerdonNews®

 

In this monthly issue we:

• Provide a governance and remuneration checklist for superannuation fund trustees to meet APRA expectations

• Consider AMP Capital's latest corporate governance report's executive remuneration themes

• Appreciate BlackRock's research paper on executive remuneration and long-term incentives

• Share APRA's view on superannuation board governance

• Reflect on Guerdon Associates' and CGI Glass Lewis' eleventh annual Governance and Remuneration Forum outcomes

• Wonder why Norway's sovereign wealth fund wishes executive pay to vary less with long term performance given its long term return mandate

• Although understand why the UK House of Commons Business, Industrial and Energy Committee’s politicians want the same thing given their more populist mandate

A checklist for the Boards of superannuation trustees

Given APRA’s particular concern with the governance of superannuation funds, an immediate improvement is warranted

We provided a brief governance and remuneration checklist to assist trustees respond.

Read more

AMP Capital says CEO pay levels and persistence of bonuses are an issue

Executive pay features prominently in its ESG review. This time, the persistence of executive bonuses  remains an issue.

Interestingly, AMP Capital has also shifted to emphasise a concern with absolute levels of CEO pay. Its latest corporate governance report identifies key ESG themes that, it believes, impact value.

Read more

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BlackRock reiterates the need to rethink executive incentive programs

Blackrock has been calling on board directors to have more effective executive remuneration

Pru Bennett used recent press coverage to remind directors of BlackRock’s research paper of 2015, "Time to Rethink Executive Incentive Programs".

Read more

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APRA takes aim at superannuation board governance

There was no mistaking APRA’s concerns with the industry’s poor governance standards

While there are funds with very good practices, APRA’s experience is that there is room for improvement for both retail and industry/employer funds.

Read more

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Eleventh Annual Forum on Remuneration and Governance - a constructive, and robust debate

Guerdon Associates and CGI Glass Lewis sponsored their eleventh annual Governance & Remuneration Forum in Melbourne and Perth in early March 

The 2017 Forum was focused on halting the erosion of trust between boards and investors by drawing out the different perspectives to facilitate a better understanding

Read more

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Norway’s sovereign wealth fund wants to cap executive pay

The world's largest sovereign wealth fund has called for a cap on executive pay and fiscal transparency at the companies in which it invests

With its weight, and its requirements on ethics and transparency, the Scandinavian fund sets the bar for investment funds worldwide.

Read more

UK politicians agree that LTIs are no good

The UK House of Commons Business, Industrial and Energy Committee’s report on Governance released on 30 March 2017 preferred LTIs to be replaced with grants of equity that vest over a long period of time

Specifically, they conclude that LTIPs should be phased out as soon as possible and replaced with grants of stock that vest over time. 

Poor performing British executives must be straining to withhold showing their glee.

Read more

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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.

Copyright © 2017 Guerdon Associates

ISSN 1834-8300