Short and long term incentives Archives - Page 3 of 8

Are You Prepared for the BEAR?
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Are You Prepared for the BEAR?

Remuneration Insights, Short and long term incentives

Are You Prepared for the BEAR?

101

25 January 2018

The Banking Executive Accountability Regime (BEAR) is likely to be passed quite soon by Parliament. It will apply to Authorised Deposit-taking Institutions (ADIs) including banks and credit unions and, potentially, insurers and superannuation funds. The legislation is in many respects less than clear, particularly with regards to remuneration. How boards interpret the policies and procedures will affect their exposure to risk of breaching the BEAR requirements.

Short Termism and the Threat Posed by an Absence of Clear Thinking

100

1 December 2017

The evidence is clear: successful companies that create ongoing shareholder wealth are focused on the long term. Performance management processes and executive reward plans need to reflect this by avoiding the encouragement of short-termism, even inadvertently.

Does Deferred/Held Equity Give Better Alignment than LTI?

99

6 November 2017

Some companies appear to be replacing LTI plans by requiring executives to defer a substantial part of their STI earnings into equity that must be retained for several years. We explore the significant defects of this approach, especially via the implementation of Single Incentive Plans (SIPs, sometimes referred to as Total Incentive Plans).

Are STIs Working?

98

21 September 2017

To settle some recently reprised myths about STI awards, we recently analysed remuneration disclosures from the ASX 300 2016 Remuneration Reports. A lack of understanding by most commentators is made worse by unclear communication and disclosure by some companies. Boards can resolve this public furore by explaining more clearly how incentives are intended to work, and why.

ASX300 Incentive Practices

97

24 August 2017

This Insight summarises and comments on the incentive practices of companies in the ASX300. The data was extracted from FY16 annual reports. As change in the incentive area tends not to be rapid, companies can be confident that this data is reflective of current practices.

Making LTIs More Relevant to Executives

95

25 May 2017

The emergence of Total Incentive Plans (TIPs), which resemble STI plans with a deferred element, has spotlit the disengagement of executives who do not fully value the LTI element of their remuneration packages. Here we identify the underlying reasons for this and propose changes to increase their engagement.

Enhanced LTI Disposal Restrictions

92

31 January 2017

Some CEOs of ASX listed companies have sold LTI shares prior to the disclosure of information that led to declines in their share prices. It seems timely to review deficiencies in the design of LTI plans which allow the sale of LTI shares as soon as they have vested.

Soft Non-Financial Targets for Incentives

90

21 October 2016

The increase in the use of “soft” non-financial metrics for senior executive incentive purposes has, unsurprisingly, attracted significant stakeholder backlash. Boards will be required to reassess this practice sooner rather than later to avoid further criticism, negative press and even legislative regulation.

ASX200 Incentive Plan Practices

86

16 July 2016

We analysed the STI and LTI practices of ASX200 companies for the GRG 2016 Incentives Guide. ASX200 companies employ large numbers of staff, and effectively set the market for remuneration practice, are usually leaders in corporate governance and are sometimes adopters of new practices. Our key findings are relevant to companies of all sizes.

Who are KMP and Why?

85

30 June 2016

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.

Are You Prepared for the BEAR?

(02) 8923 5700

info@grg.consulting

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