The forensic examination of documents by the Hayne Royal Commission is likely to lead to additional demands being placed upon Remuneration Consultants and Board Remuneration Committees.
Questioning by Counsel at the Hayne Royal Commission of Board Chairmen, CEOs and accountable executives has revealed the market’s expectation of the level of stewardship and scrutiny which shareholders and customers in particular might anticipate rests with the Board or the CEO in communicating strategy, financial results and breaches of company policy.
When it comes to executive remuneration there are multiple stakeholder commentators including government institutions such as ASIC and APRA, universities and think-tanks, remuneration consultants, proxy advisors, retail and institutional investors to name a few.
There has been a significant increase in the number of ASX 300 companies receiving a strike against their remuneration report in the 2018 AGM season, with fifteen companies overall receiving strikes compared with six in 2017.
The decade since the Global Financial Crisis can be regarded as one of considerable change in relation to incumbency and reward.
In considering executive reward, stakeholders, be they shareholders, the Board, management, regulators or proxy advisers/consultants, often review information through a lens different to that of the Executive.
Two recent shareholder-initiated strikes, one at Telstra and the other at Tabcorp, potentially reflect different foundations leading shareholders to vote against their Remuneration Reports.
Companies need to identify ways to make annual general meetings (AGMs) transparent, ethical, and effective.
In recent weeks, the Australian Council of Superannuation Investors (ACSI) published their annual review of CEO pay in the ASX 200. Research is conducted on the organisation’s behalf by Ownership Matters, an Australian governance advisory firm.
Our last research report dealing with the cost of governance was published in July 2014. Recent discussions arising from our advisory work and highlighted in Board responses from comments made by institutional investors and their advisers and issues recently arising in the Royal Commission into the financial services sector, have made several supplementary issues front and centre.