What role should incentives play in rewarding senior management?
The Australian Securities & Investments Commission issued Report 564 in January this year.
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.
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.
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.