More Corps Act Amendments Re: KMP Remuneration

On 14 December 2012 the Government released a series of draft changes to the Corporation Act relating to key management personnel (KMP) remuneration for public comment. These changes are intended to implement many of the recommendations of the Corporations and Markets Advisory Committee (CAMAC) in its 2011 inquiry into executive remuneration in Australia. These proposed changes are intended to come into effect for financial years commencing on or after 1 July 2013 and will only apply to listed companies. Briefly these changes relate to:

• Disclosures required in relation to “clawback” of overpaid remuneration when company accounts have been found within the prior three financial years to have been material misstated, including a requirement to disclose the policy in these circumstances,
• Remuneration Reports content changes including disclosure of:
• a general description of their remuneration governance framework,
• the number of lapsed options and the year in which the lapsed options were granted, rather than the value of the options,
• all payments made to KMP in connection with a retirement from the company, and
• details of “present pay”, “future pay” and “past pay”.

Comments on the proposed changes may be submitted up to 15 March 2013.

The Explanatory Memorandum expands on the foregoing points but uses terms that often seem inappropriate. GRG intends to make a submission on the proposed changes.

Copies of the proposed legislative changes and the Explanatory Memorandum may be accessed at: http://www.treasury.gov.au/ConsultationsandReviews/Submissions/2012/Improving-disclosure-requirements