64Choosing Between LTI Plans
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.
63Short Term Incentive Fundamentals
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.
62Board Committees and Fees
Although the The ASX Corporate Governance Council clearly sees all four Audit, Risk, Nomination and Remuneration committees as being important, the practices of many companies suggest that boards may be taking a different view.
61Green Light for NED Share Rights
The ASX Corporate Governance Council has significantly shifted its attitude to the provision of securities to NEDs as part of their remuneration. This is a good change provided that it is applied on a sound, reasonable and rational basis.
60Remuneration Report Audit Alert
The Remuneration Report is a critical document for various stakeholders who need to be confident of its accuracy. However, it appears that auditors have been experiencing difficulties in forming views on s300A compliance due to a lack of documentation evidencing the policies being represented in the reports.
59Major Changes to the Remuneration Landscape
There are a number of significant changes occurring in the key management personnel (KMP) remuneration space that remuneration committee members, remuneration professionals and company secretaries should be aware of, as the changes are expected to influence the way executive and director remuneration is designed, governed and communicated.
58ATO Attacks LTI Tax Fiddles
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.
57Informing Board Discretion on LTI Vesting Using Economic Performance Measures
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.
56Board Discretion on LTI Vesting
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.
55A Value-based Perspective on Executive Incentive Plan Design
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.