Welcome to the October 2019 issue of GuerdonNews^®

 In this newsletter we:

• Confirm that CEO fixed pay in ACSI's annual review continues to lag increases in average earnings

• Anticipate that ASIC's Corporate Governance Taskforce findings that boards fail to monitor and act on non-financial risk mean more work for board risk committees and remuneration committees

• Provide a checklist for our 4 principles underlying effective executive remuneration design

• Suggest that disclosures of executive realisable pay and statutory pay do not get to the heart of what investors should vote on

• Compare the greenhouse gas incentive metrics found in global companies

• Present findings of the ISS Global Policy Survey

• Suggest that companies with employee share scheme trusts should be concerned with a recent draft ATO determination

• Highlight ASIC's 4-year corporate plan features that impact governance and remuneration matters

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.

ACSI’s annual review of CEO Pay 

New CEOs fare less well than established CEOs  

ACSI found that average realised pay for ASX 100 CEOs fell in FY18, although the median realised pay rose. Average and median reported pay for these CEOs fell. The report also indicates that CEOs in the more volatile ASX 101-200 companies are more likely to receive no short term incentive than CEOs in the less volatile ASX 100.

Read more

ASIC's Corporate Governance Taskforce Report    

More work for the board risk committee and remuneration committee 

ASIC's report into board oversight of non-financial risks at large listed companies found that boards and management failed to attend sufficiently to non-financial risks. This was related to a greater emphasis on financial metrics in remuneration. Non-financial risks were also not adequately captured by clearly defined metrics.

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Executive remuneration design principles  

A four point checklist

Guerdon Associates describes 4 design principles for boards to ensure executive remuneration is fit for purpose in every organisation.

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Realisable Pay

A numbers game 

ACSI released the findings of its survey on executive remuneration in which they discuss realised pay. Guerdon Associates discusses the inherent differences between realised and realisable pay and statutory pay disclosed in annual reports. None do much to demonstrate how the board manages the principal-agent problem.

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Climate change related incentives

Comparing global companies

Guerdon Associates describes large companies' incentive metrics that relate to climate change.

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The ISS 2019 Global Policy Survey

Dissonance between investors and the companies they invest in 

ISS released the findings of their global survey of stakeholders which addressed director overboarding, gender diversity, climate change risk oversight and CEO board membership limits. 

Read more

The tax man defines an employee share scheme trust

Some may lose tax concessions because they are no longer what they thought they were 

What constitutes an employee share scheme trust is explained in a draft taxation determination by the Commissioner of Taxation. 

Read more

An armed ASIC

Close encounters of the corporate kind 

ASIC outlines its plan of action for the next four years in its recently released corporate plan. In it, it highlights the formation of its Office of Enforcement and the setting up of its Corporate Governance Taskforce. ASIC’s enhanced funding will now enable it to closely monitor entities and adopt a litigious mindset to punish serious breaches of financial services laws. 

Read more

Latest GuerdonData^® Updates

Updates to GuerdonData^®  this month include disclosures from the following 46 companies: 

Audinate Group Limited, Alacer Gold Corp., Avita Medical Ltd, Bellevue Gold Limited, Bubs Australia Limited, Codan Limited, Champion Iron Limited, Centuria Capital Group, Data#3 Limited, Investec Australia Property Fund, Isignthis Ltd, Lifestyle Communities Limited, Nickel Mines Limited, Phoslock Environmental Technologies Limited, Synlait Milk Limited, West African Resources Limited, Zip Co Limited, BHP Billiton Limited, Brickworks Limited, Boral Limited, Computershare Limited, Ioneer Ltd, Karoon Gas Australia Limited, Kogan.Com Ltd, New Hope Corporation Limited, Shopping Centres Australasia Property Group, Sonic Healthcare Limited, Wesfarmers Limited, Wisetech Global Ltd, Bendigo Bank Limited, Credit Corp Group Limited, Crown Limited, Dacian Gold Ltd, Myer Holdings Limited, Orora Limited, Ramsay Health Care Limited, South32 Limited, Coles Group Limited, GUD Holdings Limited, Jumbo Interactive Limited, New Century Resources Limited, Harvey Norman Holdings Limited, Maca Limited, Nufarm Limited, Superloop Ltd, Amcor 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.