Our Insights on: governance, strike risk management, communications and stakeholder issues.
120Unlocking the Secret to Long Term Alignment
Executives retaining large equity holdings in their employers promotes genuine long term alignment. However the many obstacles to this encourage the disposal of equity as soon as it vests to pay down an unnecessary tax liability, exposing them to ASIC scrutiny. We identify the obstacles and offer practical solutions for long term equity holding by KMP.
119A Question of Independence
In the light of the Hayne Financial Services Royal Commission, we explore what it means to be independent, and reflect on what it means for our own services and clients.
118Demergers & Long Term Variable Remuneration
Rarely do the rules governing long term variable remuneration (LTVR) plans specifically cover demerger or return-of-capital situations. In this Insight we identify various demerger situations and the principles that should inform possible approaches for consideration by boards under competing pressures from employees, governance commentators, and buyers of the demerged entity.
116Optimising Your Remuneration Report
We look at the best Remuneration Reports observable in the market; hot trends; strategies to manage all the stakeholder pressures; how to streamline the report and ensure compliance – while managing strike risks by maximising votes.
108Telstra – A Case Study in Misalignment
Despite making significant changes and disclosures in a desperate attempt for damage control, Telstra recently received what looks to be a record strike against its Remuneration Report for an ASX 50 company. How could a company so widely held by retail shareholders, self managed super funds and major institutional investors end up in such a position?
96Remuneration Reports and Risk Management – Being Prepared
The two-strike rule has made the resolution on the Remuneration Report one of the highest focus areas for governance and transparency. It is in some ways the “cutting edge” for the interaction between companies and external stakeholders. But when a strike is really a protest and not about remuneration governance, there is only one defence: having your Board’s KMP remuneration governance systems, and disclosure in the Remuneration Report, in top condition.
91Government to make Employee Share Schemes user friendly
The Government has recently released a consultation paper seeking comments from the public on changes to the Corporations Act disclosure regime that would make employee share schemes (ESSs) more user friendly. We provide context for the main areas that appear to require change, and our vision of a framework that genuinely supports equity ownership by all employees.
85Who are KMP and Why?
The apparent division into two compliance camps of Remuneration Report disclosure of KMP remuneration stems from classification of some executive roles as KMP and others as not. We offer clarification of, and guidance on practical application of, this classification.
84Using Terminology to Improve Communication
Use of imprecise terminology in engagement letters, policies, plan rules and Remuneration Reports often leads to a lack of clarity regarding intended total remuneration packages (TRPs). Poorly expressed engagement letters can create friction over different interpretations of the intended TRP outcomes, and imprecise expressions of policy can lead to concerns amongst shareholders and proxy advisers. We propose terminologies that should alleviate these problems.
83Role of the Remuneration Committee
This Insight discusses the need for Remuneration Committees and their role in compliance, governance and value creation for shareholders, in the context of ASX listed companies.