Having your cake and eating it too
Outsider took one look at the Australian Prudential Regulation Authority’s (APRA’s) Information Paper on Remuneration Practices released last week and found himself once again being overwhelmed by that green-eyed monster called envy.
Long-standing readers of Outsider will know that he is given to bouts of envy when, over luncheons with fund managers, he discovers the volume of their bonuses and notes that such sums would allow your always humble correspondent to upgrade the quality of his single malt whiskey supplies while enabling Mrs O to maintain and expand her Imelda Marcos shoe-buying therapy.
The APRA Information Paper actually represented a rap over the knuckles for many of the big institutions which have apparently not been paying close enough attention to the risk management factors inherent in executive remuneration, but a couple of things particularly caught Outsider’s eye, not least the practice of sign-on bonuses.
Outsider has, of course, worked for Money Management for eons so his knowledge of sign-on bonuses is somewhat lacking but he notes APRA’s admonition that it expects “any remuneration paid to incoming staff as compensation for deferred remuneration forfeited at a previous employer to be subject to performance validation or risk adjustment and deferral”.
Hang on? Does that mean someone can ditch an employer, but still receive the bonus they might otherwise have received? Actually, YES!
AUTHOR
The Outsider
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