Executive Remuneration in Australia

Inquiry report

This inquiry report was released on 4 January 2010.

Please note: Appendices C to E will only be available online and are not in the printed copy.

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Contents

  • Preliminaries
    • Cover, Copyright, Commissioner's letter, Terms of reference, Contents, Abbreviations and explanations
  • Overview - including key points
  • Recommendations and findings

Part A: Background and analytical framework

  • Chapter 1 What is the inquiry about?
    • 1.1 Background to the inquiry
    • 1.2 The Commission's task
    • 1.3 The Commission's approach
    • 1.4 Conduct of the inquiry
    • 1.5 Report structure
  • Chapter 2 The role and evolution of the public company
    • 2.1 Evolution of the public company
    • 2.2 Aligning interests — the pivotal role of boards
    • 2.3 The contribution of Australia's public companies
    • 2.4 The evolution of the regulatory framework

Part B: Remuneration trends and drivers

  • Chapter 3 Trends in remuneration
    • 3.1 Introduction
    • 3.2 Data difficulties and the Commission's approach
    • 3.3 What has happened to executive remuneration?
    • 3.4 What has happened to directors' remuneration?
    • 3.5 Remuneration and corporate performance
    • 3.6 Executive remuneration overseas
  • Chapter 4 Drivers of executive remuneration
    • 4.1 The 'market' for executives
    • 4.2 Explaining increases in executive remuneration
    • 4.3 'Principal–agent' issues and executive pay
    • 4.4 Broader market drivers of executive pay
    • 4.5 Some conclusions

Part C: Assessing the remuneration environment

  • Chapter 5 Overview of the regulatory and corporate governance framework
    • 5.1 Australia's current framework
    • 5.2 Approach to assessing effectiveness
  • Chapter 6 Assessing the role of the board
    • 6.1 The central role of the board
    • 6.2 Attracting talented and experienced candidates
    • 6.3 How boards determine pay
  • Chapter 7 Linking pay to performance
    • 7.1 Enhancing performance-based pay
    • 7.2 Non-recourse loans
    • 7.3 Hedging of incentive payments
    • 7.4 Issues with termination payments
  • Chapter 8 Remuneration disclosure
    • 8.1 Current remuneration disclosure
    • 8.2 Are remuneration reports clearly communicating what investors want to know?
    • 8.3 Can disclosure requirements be rationalised?
    • Annexe: Specific proposals from inquiry participants
    • Chapter 9 Strengthening shareholder engagement
      • 9.1 The non-binding vote in context
      • 9.2 How effective is the non-binding vote?
      • 9.3 Elevating the consequences of a significant ‘no’ vote?
      • 9.4 Facilitating voting
      • 9.5 Reducing conflicts of interest
    • Chapter 10 Taxation issues
      • 10.1 Introduction
      • 10.2 Taxation of equity-based payments
      • 10.3 Treatment of termination payments
      • 10.4 Taxation of bonuses
      • 10.5 Allowable tax deductions for employers

    Part D: Implications for public policy and corporate conduct

    • Chapter 11 The reform package
      • 11.1 What sort of policy action is called for?
      • 11.2 Improving board capacities
      • 11.3 Reducing conflicts of interest
      • 11.4 Improving relevant disclosure
      • 11.5 Well-conceived remuneration policies
      • 11.6 Facilitating shareholder engagement
      • 11.7 Adding it up
    • Appendix A Public consultation
    • Appendix B Remuneration data
    • References

    Please note: The following appendices will only be available online and are not in the printed copy.

Just briefly...

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Printed copies of the full report can be purchased from Canprint Communications.

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