Welcome to the December 2020 issue of GuerdonNews^®

 In this newsletter we:  

• Delve into the updated CPS 511 draft pay regulation directly impacting banks, insurers and super funds

• Update the ASX 200 companies making remuneration adjustments due to COVID-19

• Consider the extent that there is money in being a proxy adviser, with ISS's sale to Deutsche Börse

• Assess the extent that banks and insurers fail to meet the new CPS 511 executive pay requirements

• Disclose the sectors executives should have been in for higher STI award outcomes

• Describe new UK Investment Association Principles of Remuneration that could infect Australia

• Find that there is progress on gender pay gaps, but there is some way to go

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.

We look forward to reporting board governance and executive remuneration news to you again in 2021, with our first monthly issue to be delivered on the second Tuesday in February. In the interim we will, as usual, be toiling away the summer for our clients throughout January. In addition, we will be sending a special news release for our GECN Group research report into executive incentive pay contingent on ESG and other non-financial outcomes.

It has been a most unusual year for Guerdon Associates, our clients and their investors. The pandemic required ability and responsiveness from everyone in business. We trust that we were able to assist you navigate through the issues. Thank you to our clients, and their investors, for being open and responsive to reward solutions that focus executives on creating value, and board governance processes to optimise risk and return, through the pandemic, and beyond

From all of us in Guerdon Associates, best wishes for a safe, happy, virus-free and prosperous New Year.

Revised regulation impacting bank, insurer and super fund pay

APRA responds ot feedback, but not there yet

APRA responds to feedback and updated its draft regulation CPS 511. It goes easy on smaller financial institutions not considered systemically significant  There is less prescription, especially in the weighting of non-financial measures. To an extent, it does twist itself into a knot or two trying to incorporate Hayne Royal Commission recommendations, rather than considering more elegant and flexible regulation. The updates include reductions to vesting terms and holding periods and reductions to the scope of board oversight and workload. It does manage to directly conflict with current government BEAR legislation.

Read more

COVID-19 remuneration adjustments impacting almost 50% of companies

More companies disclose they have docked executive pay

We record the ASX 200 companies making remuneration adjustments in the month of November. 

Read more

Deutsche Börse buys ISS

The proxy adviser is sold (again)

The German stock exchange operator bought ISS for US$2.275b, pending regulatory approvals. This is third time that the company has been sold in 6 years, and at valuations that have risen steadily since 2014, when MSCI owned it. (Could it be that ISS executives imposed a TSR performance measure on themselves?) Net revenues are forecast to grow healthily.  

Read more

How compliant is CEO pay with new APRA incentive standards?

Some catching up to do

APRA recently released updates to their draft regulation CPS 511. It proposes a minimum amount of CEO variable remuneration that is required to be deferred for a period of up to 6 years. We analysed executive pay in significant financial institutions to check compliance with this draft regulation. Our results show that the majority of these companies fail to meet requirements, and some have catching up to do.

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STI outcomes by sector

Seriously, it really pays to be in IT

In a continuation of our research into STI award outcomes, we look into an analysis of sectors in the ASX 200. We find that three sectors had the highest STI award outcomes.

Read more

The UK Investment Association updates its Principles of Remuneration

Could impact Australian standards

The changes made by the Investment Association that are likely to be relevant for Australian companies concern post-employment shareholding requirements, use of non-financial performance measures, and issues regarding restricted share plans.

Read more

Is there gender equality in pay?

A promising increase, but at the smaller end of ASX companies

The Workplace Gender Equality Agency (WGEA) released its findings and examined, among others, gender pay gap, where there were decreases in total remuneration and base salaries. Other findings pertained to flexible work, women at the CEO and board levels, parental leave and gender equality policies.

Read more

Latest GuerdonData^® Updates

Updates to GuerdonData^®  this month include disclosures from the following 20 companies: 

ANZ Banking Group Ltd, Elders Ltd, Graincorp Ltd, Incitec Pivot, National Australia Bank, Orica Ltd, Pendal Group Ltd, Virgin Money UK PLC, Westpac Banking Corp, Synlait Milk Ltd, Aurizon Holdings Ltd, Challenger Ltd, Freedom Food Ltd, Harvey Norman, Insurance Australia, Nick Scali Ltd, Pinnacle Investment, REA Group, Select Harvests, Champion Iron 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.