The acceptability of alternative remuneration that is fit for purpose: Save this date

The afternoon of 7 March in Sydney, and morning of 13 March in Perth

FY 2017 has seen brave boards implement alternative executive remuneration frameworks believed to be a better fit for the company’s purpose. And, guess what? By and large, investors have been open to them.

The turnaround has been remarkable after a torrid FY 2016 – where some investors said boards were “sneaky” and executives were “greedy”; and some directors, in turn, labelled some investors and their advisers as “lazy”, “lacking competence”, and “lacking transparency”.

The underlying reason for the change seems to be that both sides have been listening to the other. This is not to say there is a restoration of trust. But, it is a compliment to the open-mindedness of both board and investors.

We do not necessarily think this open-mindedness is an outcome of continuous pressure by the Australian Investor Relations Association (AIRA) and others for proxy adviser regulation (although this could explain part of it). Nor is it necessarily a result of the greater effort by directors on more constructive engagement to explain their situation after so many strikes.

It is more a recognition that current executive pay frameworks are not optimal and acknowledgement that many such frameworks have defaulted to the ‘vanilla’ structures known to be acceptable.

This will be one of two areas of focus at our 12th Remuneration and Governance Forum, co-sponsored by Guerdon Associates and the proxy adviser, CGI Glass Lewis.

Save the date – the afternoon of 7 March in Sydney, and the morning of 13 March in Perth.

Company culture

The other focus of the Forum will be the extent that boards and investors become actively involved in setting standards for, and monitoring, company culture. Put simply – how is this to be done effectively?

So, for the Forum, we have a panel of investors to tell you what they now expect, with directors and executives reflecting on what this is like in practice.

The Great Debate

In Sydney, we plan to have the Great Debate on whether we have run out of women. That is, are there enough women with direct experience at executive levels in the industry to get companies beyond having a minority of women on the board to a majority?

Having become worked up over the debate, we will settle you down with a drink or two afterwards – a great opportunity to continue the networking with directors, investors and executives.

In Perth we will continue the tradition of the proxy adviser and investor roast. Note, that rotten eggs and over-ripe fruit are to be left at the door. Other than that, you are welcome to attend and let fly. After a bit of a floor mop, lunch will follow.

Invitations will be sent in late January to institutional investors, company directors, regulators and company executives. News media will be excluded. Openness is encouraged.

As in past Forums, the Chatham House Rule applies.

Watch your inbox for an invitation. If you think you may not be on the list, let us know.

By the way, when you get the invitation, act fast. The last time the Forum was held (See HERE), we ran out of room for all who wanted to attend. Perth, last year, was also full.

We look forward to seeing you at the Forum.

© Guerdon Associates 2024
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