GuerdonNews® Volume 17 Number 3

April 2021

Dear reader,

 

Welcome to the April issue of GuerdonNews®

 

 In this newsletter we:  

• Summarise ASIC’s updated advice stressing that remuneration committees press the "pause and think" button prior to incentive vesting

• Analyse pay relativity to confirm that, yes, in any one year the CEO has a favourite direct report

• Discuss Glass Lewis' views on diversity performance measures

• Describe how one of the world's largest asset managers appears to single out ASX listed companies for a bit more biffo than those on other exchanges 

• Alert you to a proxy adviser’s recent sale from pension funds to private equity

• What is not to like about reducing share based expense while getting a better governance score as well as defer taxes - we tell how

• Summarise the outcomes from the Remuneration and Governance Forum

• Highlight a recent court ruling against tax deductions for the expense of buying out employee incentives

 

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. 

 

ASIC beefs up executive remuneration advice

ASIC encourages boards to consider discretion on executive pay

The information sheet, which was released in June last year, was updated last month. ASIC wants boards to consider discretion, make decisions based on unbiased sources, manage conflicts of interest and show transparency in communicating decisions.

Read more

Executive remuneration is not distributed equally

Is there a favourite child?

Research suggests that differentiated pay has benefits. We investigate whether executives within a company are paid more or less the same as each other. To do this, we looked at the ASX300 and analysed the pay of each disclosed executive relative to their CEO.

Read more

Diversity and inclusion in executive compensation 

How to measure diversity performance

Diversity is an increasing performance measure. Boards are being asked to decide on how to measure diversity performance, and a proxy adviser is warning against “de facto guaranteed payouts”.

Read more

State Street’s stewardship report

The asset manager publishes a report card of sorts

Australian companies made up 6% of State Street’s global engagement but only 2% of its global assets. Further, it thinks Australian executive pay warrants less support than US executive pay. We discuss some of the highlights which included regional differences, the use of R-Factor, and trends such as complicated STIs, over-reliance on TSR and pandemic-enforced pay cuts.

Read more

Glass Lewis changes hands

From one Canadian owner to another

Peloton Capital Management and Stephen Smith acquire the proxy adviser from Canadian pension funds. With an eye on expansion, the new owners find particular value in the Glass Lewis’ opportunities in ESG.

Read more

Post vesting restrictions on equity

Good for the company, if not the executive

Post-vesting holding requirements are becoming more common. While it aligns shareholders’ interests, and if configured correctly, can defer tax, there is an added benefit to the company in the form of reduced share-based expense. This is because the fair values are discounted, and we discuss the factors that affect those discounts.

Read more

The 15th annual Remuneration and Governance Forum outcomes

Proxy season review and panel discussions

We summarise the panel discussions and presentation from our recent (online) get-together.

• Proxy season in review. Read more

• Non-financial performance measures. Read more

• Workplace bullying, harassment and relationships. Read more

Buying out employee incentives

Keep calm and carry on

We explain the ruling in a recent court case which found that buying out employee incentives may not constitute an expense of carrying on a business. Rather, if it relates to changing the shareholder structure of a company, tax deductions will not be available.

Read more

Guerdon Associates in the news

"ESG performance being linked to pay", Christopher Niesche, Australian Financial Review, 17 March 2021

Read more

"Why is Australia so good at ESG reporting - and tying these metrics to executive pay?", Garnet Roach, IR Magazine, 18 March 2021

Read more

"Improving shareholder support for remuneration reports", Michael Robinson, IR Magazine, 07 April 2021

Read more

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Latest GuerdonData® Updates

Updates to GuerdonData®  this month include disclosures from the following 22 companies: 

OZ Minerals Ltd, Sigma Healthcare Ltd, Resolute Mining Ltd, Alumina Ltd, Genworth Mortgage Insurance Australia Ltd, Gold Road Resources Ltd, West African Resources Ltd, Ampol Ltd, Waypoint REIT, LIFE360 Inc, Adairs Ltd, Brainchip Holdings Ltd, Chalice Mining Ltd, Dalrymple Bay Infrastructure Ltd  , Fineos Corporation Holdings Plc, Home Consortium, Humm Group Ltd, Marley Spoon AG, NUIX Ltd, Piedmont Lithium Ltd, Redbubble Ltd, TELIX Pharmaceuticals 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 © 2021 Guerdon Associates

ISSN 1834-8300