Welcome to the first 2021 monthly issue of GuerdonNews^®

 In this newsletter we:  

• Consider the outlook for director and executive pay in 2021

• Analyse ASX 300 annual CEO pay adjustments

• Share the results of our global study of ESG measures in executive incentive plans

• Publish findings on 2020 NED fees changes

• Ask you to save 2 hours on each of the 23 and 30 March for the Remuneration and Governance Forum

• Test if the effort to reduce executive and board pay due to COVID-19 improved AGM vote outcomes

• Provide an update on CGI Glass Lewis leadership changes

• Summarise APRA’s assessment of banks’ progress on BEAR implementation

• Note BlackRock’s and State Street’s differing 2021 ESG priorities

We conclude with mentions of Guerdon Associates' research in the news, and 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. 

The 2021 Australian director and executive pay forecast

We dust off the crystal ball

We share our insights into the likely defining pay-related issues for 2021. We touch on topics ranging from the economy, the emphasis on ESG and non-financial measures, the application of discretion, and alternative remuneration frameworks. We also provide our forecast on pay increases.

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The year that was - 2020 ASX 300 CEO pay levels and adjustments

No herd immunity

We analysed CEO pay over the two most recent years. As expected, COVID-19 made its presence felt. While some CEOs registered modest gains in fixed pay, a majority experience a decrease in STI. There was a similar hit to LTIs among CEOs and predictably, across the sample, the median change in total remuneration was negative. In addition, there was significant variation by company size and industry.

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Trends in ASX 300 NED fees 

Modest changes, as expected

2020 NED fees managed an increase, albeit miniscule, in spite of the effects of COVID-19. However, over the two year period under study, fewer chairmen experienced an increase in fees, as was the case with other NEDs.  There was wide sector variation.

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ESG and non-financial measures in executive incentive plans

Our global study report now freely available to clients and subscribers

In association with our GECN group sister firms, we undertook a global study into ESG and other non-financial measures in incentive plans. We catalogue the findings in various jurisdictions across the world, and find that the lucky country is also, surprisingly, the leading country. Handy, that, given that investors everywhere are ramping up their expectations.

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The 15^th annual Remuneration and Governance Forum

Save the dates: 23^rd March in Sydney and 30^th March

Our annual Forum, co-sponsored by Guerdon Associates and proxy adviser CGI Glass Lewis, will see discussions around ESG and other non-financial measures in executive incentive plans. We will also discuss and debate workplace bullying, harassment, and bonking, and the responses to it. The webinar format this year will be different, given the need to maintain social distance.

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AGM votes and executive and board remuneration adjustments

Was it worth it to reduce pay in light of the pandemic?

We tracked companies in the ASX 200 that made changes to their remuneration as a result of the pandemic. Did investors and shareholders factor in these changes when voting on remuneration reports at AGMs?

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CGI Glass Lewis promotions

New leaders announced

As Dan Smith, the outgoing APAC head leaves, the proxy adviser announces new leaders.

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Implementing the BEAR

The report card is in

APRA issued a summary report on how three of the four major banks are coming along in their efforts to implement BEAR. Teams have grown in size, senior executive accountability has improved, scenario testing has improved and consequence management frameworks are blooming.

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Major investors signal major emphasis

A couple of giants express their views

The asset managers make clear their intention to focus on ESG in 2021 and beyond. ASX-listed companies can expect particular emphasis from State Street on the extent they are progressing on racial and ethnic as well as gender diversity. This will be quite a change for almost all ASX listed companies. BlackRock and State Street also signal their intention to support shareholder proposals concerning sustainability, where they see fit.

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Guerdon Associates in the news

"Why Australia leads the world in ESG-related pay", Tony Boyd, Australian Financial Review, 22 January 2021

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Latest GuerdonData^® Updates

Updates to GuerdonData^®  this month include disclosures from the following 3 companies: 

Aristocrat Leisure Limited, Eclipx Group Limited, Technology One 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 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.