In February, damning WGEA findings laid bare the problematic and oversimplified collection, analysis and reporting of gender pay gap data. This can be remedied for genuine insights and effective action plans to impel true gender equality in remuneration. GRG offers practical support for this long overdue outcome.
SVEs represent an attractive simple element of remuneration for executives that can be introduced for no additional cost. They can also help address deficiencies with STVR and LTVR that are problems for some companies.
KMP remuneration disclosures in remuneration reports are required under the Corporations Act. However in recent years the number of executive roles reported has declined, in an apparent move away from transparent communication to minimalist compliance – perhaps to reduce exposure to criticism. We canvass the change in disclosure, its impact for boards seeking to benchmark remuneration, and explore the path to improved databases.
SIPs may at first glance seem to offer less complexity and more certainty than commonly accepted STI and LTI plans, but they are actually more complex and lead to lower payments for executives who achieve target performance.
There is now a need to seek alternative sources of current remuneration data beyond the ‘disclosed’ to include the ever-growing population of non-disclosed executive data. We compare the five main approaches to populating remuneration databases in which client companies can have a high level of confidence.
High-potential, cash-limited ASX listed companies need to efficiently compete for talent at all employee levels without the ESOP start-up tax concessions available to unlisted companies. A tax-efficient, cost-effective alternative is granting Premium Exercise Priced Options (PEPOs).
In 2022, hastily drafted amendments to the Corporations Act tried to address long-standing problems with the regulation of Employee Share Schemes (ESS). The new Division 1A of Part 7.12 only partly succeeded. After lobbying by GRG and others, substantial changes were made. This insight provides a summary of the final framework and key outcomes, actions and issues.
Boards are always in a conflicted position with remuneration. NEDs are both the decision makers and the beneficiaries of those decisions, while they must consider good governance and their legal obligations. This Insight discusses why boards must receive fee recommendations from an independent remuneration consultant.
Two key components of annual KMP remuneration reviews are information on current market practices – so directors know the environment and can be confident they've acted reasonably – and recommendations from independent remuneration consultants (ERCs). This Insight discusses these and other issues critical to remuneration reviews.
Options, SARs and SPLPs are valuable instruments for companies expecting significant future share price growth. However recent updates to ESS provisions reclassify them as “contribution plans" imposing strict limits and significant regulatory and disclosure requirements. Any company currently operating or considering an option plan should look at switching to SARs.