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.

A Small Change Will Have a Major Impact

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In the 2021 Federal Budget, it was announced that for ESS taxing purposes, termination of employment will not be a taxing trigger point for grants made on or after 1 July 2022. This small change will significantly affect the design of rights plans relating to LTVR, STVR deferral and retention programs.

Many Moving Parts: ASX Listing Rules Changes Etc.

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It is difficult to stay on top of all the rules, regulations and guidelines that need to be understood to effectively govern/oversee KMP remuneration. GRG’s complimentary Remuneration Committee Companion is designed to help you stay ahead of these issues and avoid the pitfalls.

Unlocking the Secret to Long Term Alignment

120

Executives retaining large equity holdings in their employers promotes genuine long term alignment. However the many obstacles to this encourage the disposal of equity as soon as it vests to pay down an unnecessary tax liability, exposing them to ASIC scrutiny. We identify the obstacles and offer practical solutions for long term equity holding by KMP.

A Question of Independence

119

In the light of the Hayne Financial Services Royal Commission, we explore what it means to be independent, and reflect on what it means for our own services and clients.

Demergers & Long Term Variable Remuneration

118

Rarely do the rules governing long term variable remuneration (LTVR) plans specifically cover demerger or return-of-capital situations. In this Insight we identify various demerger situations and the principles that should inform possible approaches for consideration by boards under competing pressures from employees, governance commentators, and buyers of the demerged entity.

Optimising Your Remuneration Report

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We look at the best Remuneration Reports observable in the market; hot trends; strategies to manage all the stakeholder pressures; how to streamline the report and ensure compliance – while managing strike risks by maximising votes.

Telstra – A Case Study in Misalignment

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Despite making significant changes and disclosures in a desperate attempt for damage control, Telstra recently received what looks to be a record strike against its Remuneration Report for an ASX 50 company. How could a company so widely held by retail shareholders, self managed super funds and major institutional investors end up in such a position?

Remuneration Reports and Risk Management – Being Prepared

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The two-strike rule has made the resolution on the Remuneration Report one of the highest focus areas for governance and transparency. It is in some ways the “cutting edge” for the interaction between companies and external stakeholders. But when a strike is really a protest and not about remuneration governance, there is only one defence: having your Board’s KMP remuneration governance systems, and disclosure in the Remuneration Report, in top condition.

Government to Make Employee Share Schemes User Friendly

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The Government has recently released a consultation paper seeking comments from the public on changes to the Corporations Act disclosure regime that would make employee share schemes (ESSs) more user friendly. We provide context for the main areas that appear to require change, and our vision of a framework that genuinely supports equity ownership by all employees.

Who are KMP and Why?

85

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.

Using Terminology to Improve Communication

84

Use of imprecise terminology in engagement letters, policies, plan rules and Remuneration Reports often leads to a lack of clarity regarding intended total remuneration packages (TRPs). Poorly expressed engagement letters can create friction over different interpretations of the intended TRP outcomes, and imprecise expressions of policy can lead to concerns amongst shareholders and proxy advisers. We propose terminologies that should alleviate these problems.

Role of the Remuneration Committee

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This Insight discusses the need for Remuneration Committees and their role in compliance, governance and value creation for shareholders, in the context of ASX listed companies.

Executive Remuneration Governance

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Increasing regulation, scrutiny and activism in relation to key management personnel (KMP) remuneration in listed companies has been a growing issue for boards. We summarise some underlying principles that can be broadly applied to, and documented by, the majority of ASX listed companies.

New Employee Share Scheme Taxing Provisions Released

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On 14 January 2015 Treasury released for public comment drafts of proposed amendments and explanatory materials related to previously announced changes to the employee share scheme (ESS) taxing provisions. Submissions in relation to the proposed changes may be submitted until 6 February 2015. As the amendments are intended to come into effect on 1 July 2015 it may be anticipated that the amendments will be finalised and submitted to Parliament to be passed before the end of June 2015.

Employee Incentive Schemes and New ASIC Class Orders

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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.

Board Committees and Fees

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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.

Remuneration Report Audit Alert

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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.

Major Changes to the Remuneration Landscape

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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.

ATO Attacks LTI Tax Fiddles

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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.