The 2017 and 2018 reporting periods have seen increased shareholder activism, changes in emphasis and priorities expressed by institutional investors and proxy advisors, and a sense of urgency in addressing issues arising from the Hayne Royal Commission which are clearly observed as extending beyond the Financial Services Sector.
INCENTIVES – Front and Centre
What role should incentives play in rewarding senior management?
Lessons from the 2017 AGM Season
The Australian Securities & Investments Commission issued Report 564 in January this year.
Short Term Incentive Risk Aversion in Boards
Boards, shareholders and proxy advisers are increasingly engaged in oversighting any company activity which fails to account for its exposure to risk, including short term incentive plans.
Independence and Conflicts of Remuneration Advisers
When ASX listed companies seek independent counsel on remuneration issues, remuneration advisers can find themselves faced with numerous scenarios which can result in conflict with a departing Executive, especially where the level of compensation as part of a separation or nominal resignation is being discussed.
Increase the Weight of Non-Financial Measures to Regain Trust
The recommendations of the recently released Retail Banking Remuneration Review directly oppose the stance of many investors, who have become focused on basing executive bonuses predominantly on financial measures.
Influencing Culture Through Remuneration
With regulators threatening to more closely scrutinise corporate culture, Directors will be looking to exercise all of the levers in their control to influence its development, including remuneration.
CEO Pay for Performance
This AGM season Boards will be looking to ensure that short term incentive plans are consistent with institutional investor and proxy advisor expectations of pay for performance. Egan Associates has explored the link between short term incentive payments for CEOs and company profit improvement in the ASX 100.
Company Size Makes a World of Difference to Bonuses
CEOs of small companies are by no means guaranteed an annual bonus.
ESS Tax Changes Passed
The Australian Senate passed changes to the taxation of employee share schemes (ESS) on 25 June with no amendments.