Executive gold handshakes to become less golden
The Federal Government has moved to enable shareholders, including institutional investors, to block excessive executive golden handshakes in Australia.
The move has been announced by the Treasurer, Wayne Swan, and the Minister for Superannuation and Corporate Law, Senator Nick Sherry, at the same time as referring the whole question of executive remuneration to the Productivity Commission and former Australian Competition and Consumer Commission head, Professor Alan Fels.
Under the legislative changes impacting executive golden handshakes, the Government will amend the Corporations Act to significantly lower the threshold at which termination payments must be approved by shareholders to one year's average base salary.
The legislation will also be extended to ensure that any executive covered by a company's remuneration report will have their severance payment approved by shareholders.
Dealing with the Productivity Commission inquiry into executive remuneration, the Government said it would be a broad-ranging examination that would consider the existing regulatory arrangements that apply to executive and director remuneration for disclosing entities under the Corporations Act.
The Productivity Commission is required to provide a final report within nine months.
AUTHOR
Mike Taylor
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