Godfrey Remuneration Group, independent expert remuneration consultancy in Australia

Short and long term incentives

Rights Plans Better than Share Purchase Loan Plans

124

15 May 2020

Share Purchase Loan Plan (SPLPs) are often believed to be more tax efficient for executives than Rights Plans, because SPLP share price gains are generally 50% capital gains tax free whereas Rights are 100% taxed under the employee share scheme (ESS) taxing provisions. We debunk that commonly held belief.
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Remuneration and Financial Crisis Management

123

8 April 2020

No business will be immune from the adverse effects of COVID-19 beyond the short term. With lessons from the GFC and the innovations since, we explore the key governance and practical issues for remuneration to be considered by boards and executives in tight times – as well as golden opportunities.
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Enforcing “Skin-in-the-Game”

122

20 March 2020

Properly weighted LTVR plans can facilitate longer term holding of equity interests by executives, but most are structured to neither assist nor compel executives to retain the equity earned. We examine practical optimisations of LTVR plans to achieve more “skin-in-the-game” for senior executives.
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Unlocking the Secret to Long Term Alignment

120

14 November 2019

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.
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Demergers & Long Term Variable Remuneration

118

21 August 2019

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.
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Telstra – A Case Study in Misalignment

108

31 October 2018

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?
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Buybacks and Executive Incentives

107

18 September 2018

Over recent years, many ASX listed companies engaged in share buybacks, and yet little (if any) information has been provided in Remuneration Reports on the implications of such activities on executive incentive plans. We discuss relevant aspects of share buybacks and raises some issues that may warrant consideration by Boards in relation to remuneration governance.
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Change-of-Control Provisions

106

17 July 2018

Change-of-Control (CoC) provisions are essential in both short term incentive (STI) and long term incentive (LTI) plans. Should the CoC provisions be more prescriptive in documentation on short term incentives? What factors should Boards consider when navigating through stakeholder interests to arrive at a discretionary outcome?
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Variable Pay – Victim or Villain

105

14 June 2018

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has stirred adverse commentary about the role of variable pay in influencing key management personnel (senior executives and non-executive directors) and others to behave unethically, even criminally. But how valid are these opinions?
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BEAR: Concerns with Variable Pay Deferral

104

31 March 2018

This Insight contains the contents of a letter sent to Mr Wayne Byres, Chairman of the Australian Prudential Regulatory Authority, expressing concern over the variable pay deferral aspects of the BEAR legislation, and the need for it to be amended or clarified via APRA determinations.
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GRG is a consulting firm that exclusively advises employers on employee pay and incentives for non-executive directors, top executive directors and other employees. GRG does not provide personal financial product advice and does not advise individuals or consumers of investment advice or the management of financial products such as shares or interests in superannuation funds or managed investment schemes.

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