Get valuable insights into KMP remuneration

At GRG, we can help you navigate the complexities of KMP remuneration. Our complimentary Remuneration Insights share the thoughts of some of Australia’s leading KMP remuneration consultants using our extensive Australian KMP remuneration database.

Reasonable Remuneration – Not Just Passing the Pub Test

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During 2020 there was heightened public debate about instances of remuneration practices that did not seem to be reasonable and did not meet the requirements for shareholder approval. This responsibility rests with the Board – and breaches can lead not just to reputational damage but fines and disqualifications.

Remuneration and Financial Crisis Management

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No business will be immune from the adverse effects of COVID-19 beyond the short term. Lessons from the Global Financial Crisis, as well as innovations since, can be drawn upon. We explore the key governance and practical issues for remuneration to be considered by boards and executives in times of tight cash flow. There is even a golden wealth creation opportunity for those with a modern rights plan.

The Equity Holding Trend

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An emerging corporate practice is the imposition of minimum equity holding guidelines, "equity holding policies", on NEDs and senior executives. But all are not equal, and most do not deal with failure to comply or enforcement. We explore some key variables in the development of these policies and how they may be improved.

Double Standards in KMP Pay: NED Fees

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Over recent years NED fee increases have not kept pace with the fixed pay of senior executives, or even general employees. Companies that have not introduced NEPs will soon need to make increases to NED fees significant enough to attract attention.

Boards are Underpaid

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Our own analysis indicates that fees paid to NEDs are significantly lower than their executive counterparts. Although boards have been reluctant to tackle this issue, it is an important one given the value-add now expected of NEDs, their increased workloads and personal risk exposure.

Remuneration Paid in Equities for Non-executive Directors

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Significant equity holdings by NEDs in companies where they are on the board is a tax-effective way of ensuring strong alignment between their long term interests and that of shareholders. If they do not have one, all ASX listed companies should consider introducing a NED equity remuneration plan and potentially an equity holding policy.

Board Membership Profiles and Fees

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We present information on market practice in relation to the composition of boards between executive directors (EDs) and non-executive directors (NEDs), as well as the mix of male and female directors. We also discuss NED fee levels and aggregate fees limits (fee caps) and their relationship to the number of NEDs on boards.

Short Term Incentive Fundamentals

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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.

Green Light for NED Share Rights

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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.

NED Remuneration

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Latest non-executive director remuneration review on shares and options, fees increases, aggregate fee limits, committee fees etc. ...

ASX Response to Options for NEDs

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In GRG Remuneration Review No 6 Options for Non-executive Directors which was published in April 2008 it was pointed out that the Australian Securities Exchange (ASX) had been approached seeking clarification of the treatment of share options and other equity units in relation to aggregate fees limits (AFL)...

Why Options Should be Provided to NEDs

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This article discusses the provision of equity units (shares, rights and options) as part of nonexecutive director (NED) remuneration. This is an area that has started to attract media attention and commentary from various stakeholders ...