Australia Reins In Executive Pay
It’s interesting to see how executive pay differs across various jurisdictions. It has been just over a year since Pensions & Investment Research Consultants Ltd (PIRC), Europe’s largest independent corporate governance and shareholder advisory consultancy, reported that executive pay in Australia would be undergoing significant changes.
Stating, “Legislation with teeth puts the bite on excessive payments and builds shareholder engagement,” the update went on to explain:
Thereveals that termination payments have shrunk by nearly 70% in the past five years with the median payment to chief executives falling to $A1.3m in 2013, from $A35 m in 2008.”
Although statutory pay for Australian CEOs is still sixty times above average weekly earnings, 2014 marked its lowest level in a decade. The article also points out:
Australian law now contrasts with the US Dodd-Frank Act that gives an advisory vote to shareholders with ‘say on pay’ at publicly listed companies including additional reporting and the UK legislation, applying from October 2013, requiring more disclosure and a watered down binding vote process.”
To read the complete report, which includes insights on how such an active corporate governance measure was adopted follow this link: Australia Reins in Executive Pay.