ASX clarifies corporate disclosure rules

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Executive remuneration disclosure has been tweaked in the ASX’s draft revisions to its continuous disclosure rules. The body has created Listing Rule 3.16.4, stating companies must inform the ASX of the material terms of any CEO, Director or associate of a Director’s employment, service or consultancy agreement they enter into or change.  To satisfy the obligations, organisations can provide a summary of the material terms or a copy of the agreement.

The ASX considered that most investors would expect the material terms of a CEO’s employment or service agreement, not just the CEO’s remuneration, to be disclosed to the market.  Currently this information is only required to be given to the ASX if a reasonable person would expect it to have a material effect on the price or value of the organisation’s securities, which would not be the case in most circumstances and, given the sensitivity of remuneration as an issue, the inclination would be towards non-disclosure. Now the clause will apply “regardless of the impact of that information on the price or value of an entity’s securities”.

A copy of the proposed changes (PDF) can be found on the ASX’s Public Consultations page.

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