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.

Related News:

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! 

Related Content

When bank executives escape punitive pay cuts

There have been multiple examples of lower level employees within Australia’s major financial institutions having had their pay cut for failures whi...Read more

It’s official: ASIC uncoupled from public service

The Australian Securities and Investments Commission (ASIC) has been removed from the strictures of the Australian Public Service Act and will be able...Read more

Licensees, not planners face RC-imposed changes

Licensees rather than financial planners are likely to face the greatest changes resulting from the interim findings and recommendations of the Royal ...Read more



Add new comment