BONUS SYSTEM – AUSTRALIA

Thorburn faces $1m pay cut in NAB overhaul

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Original article by James Eyers
The Australian Financial Review – Page: 17 & 20 : 20-Sep-18

National Australia Bank will disclose more details of its revised executive pay structure when its annual remuneration report is released in November. Amongst other things, NAB will no longer take into account total shareholder return when determining executive bonuses, although return on equity will continue to be a key metric. NAB chairman Ken Henry says the new pay scheme is aimed at more closely aligning executive remuneration to customer service. CEO Andrew Thorburn is among the executives to be affected by the new remuneration policy.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY

Legal test looms over Qantas’ bonus bribes

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Original article by Patrick Hatch
The Age – Page: 21 : 18-Sep-18

The Fair Work Commission may be asked to rule on the validity of its cash performance bonus scheme. The airline’s employees will be eligible for a cash bonus of $2,000 provided they sign a new enterprise bargaining agreement. Unions have expressed concern about a provision of the scheme which excludes all employees in a work group from receiving the bonus if one or more of them engages in conduct that causes harm to the airline. Unions believe that this may breach workplace laws, as the "harm" caused could potentially be interpreted to include protected industrial action.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, AUSTRALIA. FAIR WORK COMMISSION, UNIVERSITY OF ADELAIDE

Performance bonuses here to stay at ABC

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Original article by Stephen Brook
The Australian – Page: 3 : 17-May-18

The ABC has defended its remuneration system in the wake of revelations that staff received bonuses totalling $A2.6m in 2017. A spokesman has indicated that fixed remuneration rates for ABC executives are consistent with market rates, while performance pay scales are below market rates. Communications Minister Mitch Fifield notes that federal government departments abolished executive bonus schemes in 2008, but the government has no power to direct the ABC to do so.

CORPORATES
AUSTRALIAN BROADCASTING CORPORATION, AUSTRALIA. DEPT OF COMMUNICATIONS AND THE ARTS, SPECIAL BROADCASTING SERVICE (SBS), NBN CO LIMITED, COMMUNITY AND PUBLIC SECTOR UNION

Call for clean-out of AMP board

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Original article by Andrew White
The Australian – Page: 17 & 21 : 1-May-18

Institutional investors say further boardroom changes are needed at AMP following the resignation of chair Catherine Brenner in the wake of the banking royal commission’s revelations. First Super CEO Bill Watson still intends to vote against the election of three directors at the upcoming AGM, arguing that AMP directors must be held accountable. Australian Council of Superannuation Investors CEO Louise Davidson says AMP should also look at stripping bonuses from executives who were involved in the fees-for-no-service scandal. AMP has appointed Mike Wilkins as executive chairman.

CORPORATES
AMP LIMITED – ASX AMP, FIRST SUPER PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, ART GALLERY OF NEW SOUTH WALES, BORAL LIMITED – ASX BLD, COCA-COLA AMATIL LIMITED – ASX CCL, CLAYTON UTZ, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, IMF BENTHAM LIMITED – ASX IMF, PHI FINNEY McDONALD, SHINE LAWYERS, SLATER AND GORDON LIMITED – ASX SGH, QUINN EMANUEL URQUHART AND SULLIVAN LP

APRA targets banker bonuses

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: W1 & W2 : 5-Apr-18

A review of remuneration in the banking, insurance and superannuation industry shows that senior executives are rarely penalised financially for poor risk management practices or misconduct among staff within their purview. Wayne Byers, the chairman of the Australian Prudential Regulation Authority – which undertook the review – says bank executives should be held more accountable, calling for their bonuses to be deferred or forgone. Frank Mirenzi of Moody’s Investors Service notes that many countries have cracked down on executive pay in the banking sector in the wake of the global financial crisis.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, MOODY’S INVESTORS SERVICE INCORPORATED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC

Woodside rejigs pay to drive discipline

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Original article by Samantha Bailey
The Australian – Page: 20 : 20-Mar-18

Woodside Petroleum CEO Peter Coleman was paid a total of $A10.3m in 2017, including almost $A4m in incentives. Some two-thirds of Coleman’s short-term incentives were paid in cash, but his future cash bonuses will be restricted to 12.5 per cent under Woodside’s revised executive incentive structure. Other key executives will also be restricted to cash bonuses of 12.5 per cent. The changes follow a review of Woodside’s incentive plan in 2017.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL

Glencore ends $700pw strike bonus

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Original article by James Thomson
The Australian Financial Review – Page: 3 : 31-Jan-18

Glencore will seek to terminate the enterprise agreement at its Oaky Creek coal mine in Queensland in a bid to end a long-running union dispute. Some 175 union members have been locked out of the site for more than 200 days, but a clause in the enterprise agreement requires them to receive the productivity bonuses that are paid to employees and contractors who have defied the picket line. It is believed that some picketers have been paid up to $A700m per week in productivity bonuses.

CORPORATES
GLENCORE PLC, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF AUSTRALIA, AUSTRALIA. FAIR WORK COMMISSION

South32 execs pay the price for lower output

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Original article by Tess Ingram
The Australian Financial Review – Page: 19 : 15-Sep-17

South32’s failure to achieve its target of an 0.9 per cent return on invested capital in 2016-17 has in turn resulted in lower short-term incentive payments for its key executives. CEO Graham Kerr was paid just 55.3 per cent of his maximum potential short-term incentives, although his total remuneration for the financial year rose from $A4.2m to $A5m. South32 does not intend to make any changes to its executive remuneration policy in 2017-18.

CORPORATES
SOUTH32 LIMITED – ASX S32

Two strikes rule reining in exec pay

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Original article by Joanna Mather
The Australian Financial Review – Page: 3 : 24-Aug-17

The Australian Council of Superannuation Investors has released the findings of a survey which shows that the top listed companies have not significantly increased their CEOs’ salaries in the last 10 years. The annual fixed pay of S&P/ASX 100 CEOs has been steady at about $A1.9m, while bonuses have also been relatively steady. ACSI CEO Louise Davidson notes that the trend has coincided with the introduction of the "two strikes" rule.

CORPORATES
AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, STANDARD AND POOR’S 500 INDEX, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, CHALLENGER LIMITED – ASX CGF, MACQUARIE GROUP LIMITED – ASX MQG, JAMES HARDIE INDUSTRIES PLC – ASX JHX, WESTFIELD CORPORATION – ASX WFD, PREMIER INVESTMENTS LIMITED – ASX PMV, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, CSL LIMITED – ASX CSL, FORTESCUE METALS GROUP LIMITED – ASX FMG, QANTAS AIRWAYS LIMITED – ASX QAN

Morrison warns all options open

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Original article by Andrew Tillett, James Eyers, Sally Patten, James Frost
The Australian Financial Review – Page: 1 & 8 : 9-Aug-17

Proxy advisers and institutional investors have welcomed the Commonwealth Bank of Australia’s decision to reduce executives’ short-term bonuses in the wake of the money-laundering scandal. However, they argue that CBA must take further action, while federal Treasurer Scott Morrison has told CBA chair Catherine Livingstone that the Government will look at a range of sanctions. The CBA scandal has resulted in increased pressure for the Government to hold a royal commission into banks, but Prime Minister Malcolm Turnbull has warned that doing so could jeopardise AUSTRAC’s case against CBA.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, CGI GLASS LEWIS PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, UNISUPER LIMITED, OWNERSHIP MATTERS PTY LTD, AUSTRALIAN SHAREHOLDERS’ ASSOCIATION