The Federal Government is proceeding with further reforms of executive remuneration, which follow on from new powers introduced in July last year which provided rules giving shareholders the right to approve executive remuneration.
The new proposals include:
- listed companies will have to disclose what steps have been taken to claw back bonuses where a material misstatement of the financial statements has occurred. Where no claw back occurs, the company must provide a detailed explanation to shareholders;
- More transparent disclosure of golden handshake payments;
- Simplified remuneration reporting, removing unnecessary disclosures and categorising pay to make it easier to understand;
- Certain unlisted entities will have relief from preparing a remuneration report;
- Related party transaction disclosure will be found in the Corporations regulations as they will be removed fom accounting standards from 1 July 2013.
Draft legislation is yet to be released, but will most likely be released in the second half of 2012.