The global financial crisis has placed the nature and structure
of executive remuneration under increased scrutiny. The combination
of local and international events, particularly in the United
States where executive pay is a central point of debate in the
assistance being provided to that country's key financial
institutions, means that there will be stricter rules around
remuneration.
Proposal To Amend Corporations Act
The Federal Government has taken a first step in proposing to
amend the Corporations Act 2001 (Cth) to reduce the
threshold limit on termination payments before shareholder approval
is required. The cap on termination payments will fall from up to
seven times total annual pay to a threshold of just one year's
average base salary. It is a significant reduction, although the
approval for such payments remains with shareholders.
