Mutuals and co-ops may have their act more together on pay than listed companies.
Their recently released Governance Principles may hark back to a more innocent time, but on closer examination, there are lessons here for the convoluted and, too many, excessive ASX Corporate Governance Principles (see HERE).
The Australian Business Council of Cooperatives and Mutuals released its new principles on 9 August 2018.
After the arduous work of reviewing the draft ASX Corporate Governance Council’s proposed principles, they were a relief.
Their Principles relating to director and executive pay ran to (wait for it) 2 pages. Compare this to the draft ASX CGC’s 6 pages. The Council conveyed the purpose of remuneration governance in a balanced and clear way that is worth quoting:
“CMEs will be aware of the increasing calls for listed entities to modify executive remuneration strategies that tie performance bonuses to share market performance, and often produce inappropriate outcomes for consumers and investors.
“CMEs tie performance payments to member satisfaction rather than share price, and as such, CME executives are incentivised to return value to members. “
Nicely said. See it HERE.
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