The Parliamentary Secretary to the Treasurer, the Hon David
Bradbury MP, introduced legislation to give shareholders new powers
over the pay of company directors and executives and strengthen the
transparency of Australia's executive remuneration framework.
The Corporations Amendment (Improving Accountability on Director
and Executive Remuneration) Bill 2011 implements the
Government's response to the recommendations made by the
Productivity Commission in its recent inquiry into Australia's
The key measures to improve the remuneration framework
Strengthening the non-binding vote on remuneration, by giving
shareholders the opportunity to remove the directors if the
company's remuneration report has received a 'no' vote
of 25 per cent or more at two consecutive annual general
Providing accountability and transparency with the use of
Eliminating conflicts of interest by prohibiting directors,
executives and their closely related parties from participating in
the vote on the remuneration of key management personnel
Ensuring that the link between remuneration and performance
remains closely linked by prohibiting directors and executives from
hedging their incentive remuneration, and
Requiring shareholder agreement for declarations of 'no
vacancy' at an annual general meeting, should the number of
board positions filled be less than the maximum number specified in
the company's constitution.
The draft legislation was released for public consultation,
which concluded last month. The Government reforms are intended to
take effect from 1 July 2011.
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