Guerdon Associates recently extracted the remuneration committee membership data for the ASX 300 from GuerdonData®. We were surprised at the results.
We found that in 53 out of 279 (19%) remuneration committees the CEO was an official member. The average market capitalisation of these companies was $1.6 billion, with 16 companies over $1 billion.
Whilst ASX Guidance Note 9 only recommends a majoriy of independent non-executive directors on the remuneration committee, several other local and international corporate governance proxy policies/voting guidelines call for a committee free of executive directors. Six out of nine governance policies or stock exchange listing rules explicitly call for a remuneration committee made up solely of non-executive directors, including Vanguard Investments Australia, Colonial First State, the UK Combined Code, the NYSE and NASDAQ.