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66Employee Incentive Schemes and New ASIC Class Orders
Dec 2014
Released last October by ASIC, Class Order (CO) 14/1000 relates to employee incentive schemes (EISs) operated by companies listed on the ASX and other specified stock exchanges. Our focus here is on plans using equity as part of remuneration arrangements for key management personnel.
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64Choosing Between LTI Plans
Aug 2014
Recently there has been a limited re-emergence in the use of Share Purchase Loan Plans (SPLPs) as executive long term incentive (LTI) plans. However, whether an SPLP or an options plan or a rights plan is most appropriate for a particular company for most of its executives needs consideration of all the features of the different plans and the circumstances of the company.
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63Short Term Incentive Fundamentals
Jul 2014
The level of understanding of when an STI should be used and how its design features should be constructed seem not to be well understood by many stakeholders. Here we seek to provide clarity as to the fundamentals of STI plans. The market practice information quoted has been extracted from the 2014 GRG Incentives Guide.
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58ATO Attacks LTI Tax Fiddles
Mar 2014
This Insight covers those aspects addressed by a draft Tax Ruling released for public comment by the Australian Taxation Office (ATO) in relation to long term incentive plans (LTIs) of ASX listed companies.
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57Informing Board Discretion on LTI Vesting Using Economic Performance Measures
Feb 2014
This issue contains very useful information on exercising Board discretion in relation to vesting of LTI grants. Sophisticated financial analysis was undertaken in relation to this issue, and we present the insights that arose from it.
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56Board Discretion on LTI Vesting
Jan 2014
In light of the decision by the Board of BHP Billiton to reduce the level of vesting in relation to the 2008 long term incentive (LTI) grants that had a measurement period ending in 2013, this issue discusses the critical questions that need to be considered in relation to the exercising of Board discretion related to vesting of LTI grants.
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55A Value-based Perspective on Executive Incentive Plan Design
Nov 2013
Shareholder value is created when management either delivers performance in excess of market expectations, and/or when it convinces the capital markets that it has put a strategy in place that will enable it to do so. The article discusses the application of this simple tenet of finance in the context of setting goals and establishing business performance measurement systems particularly when designing executive reward plans.
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52Treating “Good Leavers” Badly
Aug 2013
One of the surprising findings from research reported in the 2013 GRG KMP Incentives Guide is that most companies appear to be exposing executive KMP who are “good leavers” to reduced benefits on cessation of employment including reduced STI payouts and lower or nil vesting of LTI grants. This issue needs urgent attention.
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50Company Aligned New Incentives
Jun 2013
In December 2012 Blackrock released a paper titled 'Time to Rethink Executive Incentive Programs'. It was critical of many incentive plans being used for executives who are KMP, and suggested that companies were not designing incentive plans to suit their specific circumstances. This paper discusses three companies, namely Macquarie Group, Seek and Tatts Group, that have or are considering adopting different approaches to KMP incentive remuneration.
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49Clawback of Overpaid KMP Remuneration
May 2013
Released in December 2012, 'Corporations Amendments – Improving Disclosure Requirements' recommended a clawback of remuneration overpaid to key management personnel (KMP). The topic remains relevant due to many companies already having introduced clawback policies.