GuerdonNews® Volume 13 Number 10

November 2017

Dear reader,

 

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Welcome to the November 2017 issue of GuerdonNews®

Since our last newsletter, Australia's parliament is considering BEAR legislation that prescribes how bank executives are to paid and made accountable. Meanwhile, the Nobel prize for Economics went to Richard Thaler. While Richard is a bit busy right now to join Guerdon Associates, we do our best to introduce his ideas to our clients if their external stakeholders let us. Which is why we take an interest when the absence in Australia of a stewardship code is suddenly filled. Although, if the UK is anything to go by, having one does not preclude the prospect that mediocrity could be as well rewarded as brilliance. It seems US President Trump, at least, would be supportive, given that his tax bill devalues pay for performance. 

Read about it in this month's issue where we:

• Highlight key points of the Banking Executive Accountability Regime currently before Parliament.

• Consider the executive remuneration applications of the research that won the Nobel prize for economics.

• Remain surprised that Australia has only recently received a stewardship code given the advances of other countries.

• Note that the UK Investor Association's newest guidelines could lead to less differentiation between star and average performers. 

• Describe proposed US tax changes that could fundamentally change US executive pay, and the implications for Australian companies. 

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

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The BEAR has arrived

Banks must comply with most requirements by 1 July 2018. 

The Banking Executive Accountability Regime legislation is before federal parliament and has been referred to the Senate Economics Legislation Committee. While there are no certainties in politics, the short time frame means ADIs should be considering implementation. Our analyses indicate that a substantial proportion of ADIs may fail to meet prescribed executive remuneration requirements

Read more

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Nobel Prize integrates economics with behaviour 

There is substantial scope for its application to executive pay. 

The Nobel Prize for economics explored the consequences of limited rationality, social preferences, and lack of self-control. The predictable behaviours arising from these predispositions have remuneration applications.

Read more

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Australia slowly makes headway with a stewardship code

But only for asset managers and not yet superannuation funds.  

The Financial Services Council has released an Internal Governance and Asset Stewardship Standard to promote higher standards of internal governance and stewardship and provide better information to clients and stakeholders.

Read more

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UK's Investment Association suggests companies reduce pay for performance 

Ayn Rand must be spinning in her grave.

The UK Investment Association, whose members manage £7 trillion in assets across the globe, has released its updated guidances for the upcoming 2018 voting season. This is important insofar as the Association's guidelines are referenced by many Australian governance stakeholders.

Read more

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Proposed US tax changes impact on US and Australian Pay 

Sweeping changes to the taxation of executive compensation and employee benefits.

This will be important to Australian companies with US executives, and has implications for most global companies given the predilection of the US to hoover up the best global talent because of it pay practices.

Read more

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Latest GuerdonData® Updates

Updates to GuerdonData®  this month include disclosures from the following 63 companies: 

ARDENT LEISURE GROUP, ADAIRS LIMITED,AINSWORTH GAME TECHNOLOGY LIMITED, AUTOMOTIVE HOLDINGS GROUP LIMITED, ALTIUM LIMITED, AMCOR LIMITED, AUSTRALIAN PIPELINE TRUST, Arena Reit Stapled, BURSON GROUP LIMITED, Brickworks Limited, BANK OF QUEENSLAND LIMITED, CREDIT CORP GROUP LIMITED, CASH CONVERTERS INTERNATIONAL, Costa Group Holdings Limited, CHARTER HALL GROUP, COMPUTERSHARE LIMITED, CORPORATE TRAVEL MANAGEMENT LIMITED, CROWN LIMITED, CEDAR WOODS PROPERTIES LIMITED, ERM POWER LIMITED, ENERGY WORLD CORPORATION LTD, GBST HOLDINGS LIMITED, GDI PROPERTY GROUP, Gateway Lifestyle Group Stapled, GUD HOLDINGS LIMITED, GREENCROSS LIMITED, Highfield Resources Limited, INFIGEN ENERGY, INDEPENDENCE GROUP NL, INGENIA COMMUNITIES GROUP, IPH Limited, JAPARA HEALTHCARE LIMITED, Link Administration Holdings Limited, MG Unit Trust Units, MINERAL RESOURCES LIMITED, MACA LIMITED, MCMILLAN SHAKESPEARE LIMITED, MONADELPHOUS GROUP LIMITED, MACQUARIE GROUP LIMITED, Mesoblast Limited, MANTRA GROUP LIMITED, MONASH IVF GROUP LIMITED, MYER HOLDINGS LIMITED, MAYNE PHARMA GROUP LIMITED, NEWCREST MINING LIMITED, NINE ENTERTAINMENT CO. HOLDINGS LIMITED, NIB HOLDINGS LIMITED, NAVITAS LIMITED, NEXTDC Ltd, PACT GROUP HOLDINGS LTD, PERPETUAL LIMITED, Platinum Asset Management Limited, REA GROUP LTD, RETAIL FOOD GROUP LIMITED, RAMSAY HEALTH CARE LIMITED, Shopping Centres Australasia Property Group, SPOTLESS GROUP HOLDINGS LIMITED, Tassal Group Limited, AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED, OROCOBRE LIMITED, PREMIER INVESTMENTS LIMITED, TPG TELECOM LIMITED,VILLAGE ROADSHOW 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.

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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