ASX 50 Remuneration Report Readability

The ASX 50 reporting standards are generally higher than other companies in the ASX 300 due to investor and proxy advisor expectations. Does this translate into better readability?

Periodically we undertake research to measure remuneration report readability. If you are an ASX 100 company be aware that we know just how readable you reports are, and if you have slipped in ratings.

Our last published research on ASX 50 remuneration report readability (HERE ), focussed on LTI descriptions. This time Guerdon Associates researched the ASX 50 remuneration report readability, covering three sections:

  • The Remuneration Committee Chair letter
  • The Short-Term Incentive framework; and
  • The Long-Term Incentive framework

The following readability tests were applied in this study:

  • Gunning-Fog Index
  • Coleman Liau Index
  • Flesch Kincaid Grade Level
  • Automated Reading Index (ARI)
  • Simple Measure of Gobbledygook (SMOG)

The ease of reading assessment is based on the years of formal education needed to understand a text. The Gunning-Fog Index measures the level of formal education needed for a person to understand the text on first reading. The other tests gauge the years of formal education needed to fully comprehend the text.

Scores below 12 indicate that the reader does not require higher education to understand the text, while a score less than 15 indicates that the reader does not require a graduate degree to understand the text. A score above 17 means someone requires a PHD to be able to understand the text at first reading.

The five readability test indices were averaged for each company to create a “combined index”. The ASX 50 readability results are summarised in the table below. It displays summary statistics for the average score of all three sections for each company.

Table 1: Remuneration report readability score





25th Percentile


50th Percentile


75th Percentile



The average of all indices suggests that the reader of ASX 50 remuneration reports needs a graduate degree to understand the text.

The table below breaks down the readability score by three sections as listed above. It displays summary statistics for the average score of each section for each company.

Table 2: Remuneration report readability score by section


Remuneration Committee Chair Letter

Short Term Incentive Framework

Long Term Incentive Framework





25th Percentile




50th Percentile




75th Percentile





On average, readers need a graduate degree to understand the remuneration committee chair letters and incentive frameworks of the ASX 50.

It should be noted that the software used only accounts for the language of the text rather than presentation or any other features such as tables or charts.

To have your own reports analysed for readability, click HERE.

In case you were curious, the Gunning-Fog index for this article is 12.34. Try it. Find a 17-year-old and ask if she can understand this article. Bear in mind that this does not mean that she will be interested in what is being read.

Methodology notes.

Five readability indices noted above were used for this analysis. Nine out of ASX 50 companies do not have all 3 sections in the remuneration report:

  • US-listed companies do not have remuneration committee chair letters.
  • Four companies have combined incentives. For those four companies, the combined incentive is captured in the LTI section.
© Guerdon Associates 2024
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