Remuneration Committees: All Change, Please

Key Points:

From 1 July 2011, all S&P/ASX 300 entities will be required to have a remuneration committee composed entirely of non-executive directors.

The change is contained in a new listing rule released by ASX this week. In addition, from 1 January next year, all listed entities will have new reporting requirements relating to remuneration committees.

Until now, the composition of listed entity remuneration committees was a matter for the entities themselves. However, in the wake of the Productivity Commission report on executive remuneration, ASX began looking at ramping up its requirements for remuneration committees, with particular emphasis on their composition.

The result has been the aforementioned requirement for S&P/ASX 300 entities and a new reporting requirement for all listed entities.