ASX Governance Council Removes Remuneration Disclosure Recommendation
07/11/2006
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Amongst all the additions to the ASX Governance Council’s recommendations, there have also been some deletions. This includes the deletion of the recommendation to disclose executive and director remuneration. But this is not due to a change of heart by the Council that they think remuneration disclosure is not a worthwhile governance exercise. And the change will only, in effect, exempt a few companies.

Specifically, Recommendation 9.1 (Provide disclosure in relation to the company’s remuneration policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance) has been removed.

The accounting standards on remuneration disclosure and the CLERP 9 legislation were not finalised at the time the principles were first released which meant that much of the material in the original Recommendation 9.1 was not produced elsewhere at the time. During the review of the principles the Council concluded that it reproduces material now captured by the Corporations Act and the accounting standards. Therefore the recommendation has been removed.

The changes mean that there are some listed companies that are not covered by the relevant parts of the Corporations Act and AASB requirements that would be exempted altogether, in effect, from these disclosures. These listed companies are foreign companies listed on the ASX (As per Corporations Act Sections 295A, 250RA and 300A and AASB 124), trusts (Sections 250RA and 300A) and foreign exempt companies (Listing Rule 4.10.3, Sections 295A, 250RA, 300A and AASB 124).

For related articles in this ASX Governance Council’s principles amendments series, see:
Major Changes to ASX Good Governance Principles
ASX Governance Council Requires Evaluation Of Directors And Senior Executives
ASX Governance Council Recommendation Requires That Many Companies Change Their Remuneration Committee
ASX Governance Council Changes Catch Hedging Of Executive Options
ASX Governance Council Removes Guideline For Disclosure Of Non-Executive Director Retirement Benefits
ASX Council Unsure On Senior Executive Equity Pay
ASX Governance Council And ASX Not Sure Where To Go On Director Equity

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