Remuneration

Getting the ratios right

The pub test – now there’s a great Australian institution, that metaphorical test that unearths the thoughts and opinions of ordinary folk when it comes to judging the behaviour of groups or individuals.

It’s usually spot on, and no more so than in the perceptions of CEOs and their salaries, where those in the front bar will tell you – as they did recently in the case of Australia Post’s outgoing CEO, Ahmed Fahour – that there’s a yawning gap between public expectation and reality.

Indeed, a raft of respected research suggests that huge CEO salaries can have a detrimental effect on the organisation.
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When a binding vote shouldn’t be a bind for boards

New British PM Theresa May has hardly got her feet under the desk at 10 Downing Street and already she’s sending out signals that she’s committed to a corporate governance overhaul – making shareholder votes on pay binding and getting employees onto company boards her two main thrusts.

And while it sounds more like the words we’d expect from Labour leader (well, at least he is at the time of writing) Jeremy Corbyn, these sentiments are to be welcomed.

Let’s take a closer look at the first issue, that of giving shareholders a binding vote on executive remuneration, this week, before turning to the employee representative matter next time.
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