GuerdonNews® Volume 13 Number 5

June 2017

Dear reader,

 

Welcome to the June 2017 issue of GuerdonNews®

 

In this monthly issue we:

• Assess ISS' new quantitative 'pay-for-performance' model

• Review the first update to the NZX corporate governance code since 2003 and its impact on executive and director remuneration disclosure

• Discuss ASIC's initial foray into the world of proxy adviser regulation

• Consider a range of possible implications arising from the federal budget on bank pay

We conclude with references to Guerdon Associates in the news.

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ISS' new 'Pay-for-performance' evaluation approach

The world's largest proxy adviser has announced the implementation of its quantitative analysis model to ASX300 constituents

The model is based on three quantitative measures and is already in effect in the UK, Canada, US and much of Europe. Despite its flaws, it will significantly influence AGM remuneration report vote outcomes for ASX 300 companies with a significant proportion of securities held offshore.

Read more

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New Zealand listed companies to disclose CEO and director remuneration details

The first update to the New Zealand Stock Exchange (NZX) Corporate Governance Code since 2003 requires significant changes for corporate governance reporting in New Zealand 

This article will focus on the key changes to the NZX code and their impacts on remuneration disclosures.

The changes come in to effect from 1 October 2017. Although there is still considerable uncertainty as to the extent of reporting that will result from the change, there is a danger that in the absence of specific guidelines NZX companies may make the mistake of reporting in formats that resemble Australian disclosures. 

Read more

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Proxy adviser regulation proposed in Australia

An attempt to have proxy adviser firms subject to new guidelines received an airing before ASIC Commissioners.

The Australasian Investor Relations Association has released a draft code to ensure proxy adviser recommendations are clear, correct and free of conflicts. However, some may say "be careful what you wish for...".

Read more

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Budget flags legislation for APRA to play HR manager

Smaller banks, and especially mutuals, will have to make significant changes to their current remuneration arrangements

At worst, a significant cost that is variable with results may become a fixed, as banks reduce incentive pay for higher fixed pay. This blunting of banks ability to cope with significant downturns is surely an unintended consequence. 

Read more

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Guerdon Associates in the news

“Wesfarmers pay experts warns that salaries must fall”, Michael Bailey, Australian Financial Review, 30 May 2017, p. 18

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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