ASIC recently announced that it has more to say on the issue of executive remuneration and has called on companies to improve the disclosure of their remuneration arrangements for directors and executives following its review of over 100 remuneration reports.
It has provided a number of examples of procedures used by some companies that “others could adopt to provide the Chair of the meeting with greater confidence that only those votes that are permitted under the law have been counted” including:
- requesting the KMP to advise their closely related parties of the voting prohibitions
- providing members of the KMP with a pro forma letter with instructions for nominee companies or trusts on not voting their shares
- seeking assurances from KMP that they will not cast votes, and
- confirming that the share registry service provider, if used, has excluded the relevant votes.
ASIC also provided a number of examples of how the following information required in remuneration reports could be better presented:
- the board’s policy on the nature and amount of remuneration of the key management personnel
- the non-financial performance conditions in short-term incentive plans
- why performance conditions have been chosen, and
- the terms and conditions of incentive plans.
The examples can be found at the ASIC website