GuerdonNews® Volume 16 Number 2

March 2020

Dear reader,

 

Welcome to the March 2020 issue of GuerdonNews®

 

 In this newsletter we: 

• Summarise ASX300 NED fee increases by industry and company size

• Consider whether board discretion should be applied to executive incentives in cases of "force majeure"

• Free of charge, divulge the formula for supportive remuneration report votes

• Advise that our annual Remuneration and Governance Forum is proceeding as planned, albeit with more sanitisation than we would have thought necessary behind closed doors

• Put forward opportunities in a paper to Treasury on the proposed Financial Accountability Regime

• Describe major ESG reporting frameworks and standards

• Highlight how much major global asset managers diverge from proxy advisors' ESG recommendations

• Note Warren Buffet’s observations on the extent that board directors independence may depend on how rich they are

 

We conclude with executive and director remuneration disclosure updates available on the GuerdonData® on-line database. And if you have any other executive remuneration or governance query, type it into your search engine with "Guerdon Associates" and you will find we will likely have provided an answer already.

ASX300 NED pay trends 

Guerdon Associates analyses changes in individual director fees over the two latest disclosure periods

A greater percentage of non-executive directors experienced a rise in their fees than last year's analysis. We further break down and present non-executive director pay trends across companies of varying size and in different sectors.

Read more

Executive pay and force majeure   

Does Covid-19 present a need for positive discretion?

We anticipate that the coronavirus will have a negative impact on company performance and, by extension, executive remuneration . We suggest a checklist for applying board discretion on executive incentive outcomes for this and other events that could be considered force majeure. 

Read more

The secret sauce for massive remuneration report support

Asset size and TSR play a part 

Guerdon Associates analysed remuneration report votes and found that companies with higher TSR and smaller asset size are less likely to get no votes.  

Read more

2020 Remuneration and Governance Forum

All systems are go

Our annual Remuneration and Governance Forums in Sydney this Tuesday 12 March and Perth on 20 March are still proceeding as planned. Government authorities have indicated to us that there are no restrictions on conference attendance in light of COVID-19, but recommend higher levels of hand hygiene. Join us to discuss proposed regulation and pushback, board discretion and its alternatives, and managing non-financial risk.

Read more

Guerdon Associates’ submission to the Treasury on the FAR

A brief summary

In our submission we note, among other things, the difference between the Banking Executive and Accountability Regime (BEAR) and the Financial Accountability Regime (FAR) on the required amount to be deferred in variable remuneration, as well as shortcomings in calculating the amount. 

Read more

ESG disclosure standards and frameworks

A directors' guide to the alphabet soup

Companies not disclosing material ESG risks could be held liable. But where do you start? Do you know your TCFD from your SASB? We provide a handy director guide to make sense of what frameworks and standards there are for newcomers. 

Read more

Proxy advisor influence on ESG

Large asset managers are not as compliant

Research has found that global asset managers do not always follow proxy advisor recommendations when it comes to ESG. The US index funds in particular may refer to their own research and vote accordingly.

Read more

Warren Buffet’s observations on director independence

Better not to rely on fees 

Warren Buffet casts doubt on directors who seek multiple appointments onto boards and questions the logic behind the definitions of board director independence. 

Read more

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Latest GuerdonData® Updates

Updates to GuerdonData®  this month include disclosures from the following 31 companies: 

Appen Ltd, Coca-Cola Amatil, Costa Group Holdings, CIMIC Group Ltd, Caltex Australia, G8 Education Ltd, Genworth Mortgage Insurance Australia, GPT Group, Galaxy Resources, HT&E Ltd, Iluka Resources, Iress Ltd, Invocare Ltd, Janus Henderson, Ooh!Media Ltd, Oil Search Ltd, OZ Minerals, QBE Insurance Group, Scentre Group, Smartgroup Corporation, Spark Infrastructure , Santos Ltd, Sydney Airport, Viva Energy Group, Viva Energy REIT, Woodside Petroleum, WPP AUNZ Ltd 

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 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 © 2019 Guerdon Associates

ISSN 1834-8300