Create capabilities that improve your corporate remuneration governance
Key management personnel (KMP) remuneration is a complex and evolving area. Regulatory changes have had a significant impact upon corporate remuneration practices and governance frameworks in Australia.
Areas of consistent review that impact remuneration governance are:
- The Corporations Act 2001
- ASX Listing Rules and Guidance Notes
- ASX Corporate Governance Council’s Principles and Recommendations
- ASIC Regulations and Guidelines
- Employee Share Scheme taxing provisions
- APRA – Requirements for APRA Regulated Entities
APRA regulated entities are also required to engage an independent party to review their Remuneration Framework against the requirements of APRA CPA 511 and CPG 511, and to assess efficacy, at least once every 3 years.
As a remuneration governance specialist whose primary customers are remuneration committees and boards, GRG is in a unique position to provide such an independent review. For over 20 years GRG has provided comprehensive solutions that help optimise remuneration governance outcomes.
Over that time we have observed that with board turnover and role changes, committees can end up “reinventing the wheel” each time they revisit an issue, particularly when aspects of remuneration are only deeply reviewed each three years or so, such as in the case of long term incentives. Many problems arise from inconsistent decision making and the lack of a commonly shared or agreed set of principles that are best outlined in a framework, and can serve to efficiently inform and align new board or committee members.
We assist remuneration committees and/or decision makers to develop KMP Remuneration Governance Frameworks that overcome the inevitable changes in both board composition and the governance landscape.