The National Australia Bank board has moved to push its senior executives away from short-term remuneration objectives, announcing a key set of changes to the Australian Securities Exchange (ASX) late yesterday.
The ASX announcement said the board had received shareholder feedback on both the extent to which variable reward was aligned to the achievement of long-term objectives and the circumstances in which the board would exercise its discretion to reduce, forfeit, further extend or claw back deferred awards.
It said that from this year onwards, 60 per cent of variable reward for executives would be deferred in dividend eligible shares for a minimum of four years, in a move aimed at driving sustainable long term performance and “aligning Executive and shareholder experience”.
The ASX announcement said that the board would be monitoring and reviewing performance periodically throughout the deferral period and prior to any vesting to ensure performance was maintained and there was no new information that would alter the original decision to award a deferred variable reward.
“In the event that there is a significant risk or conduct matter that comes to light, the Board would consider forfeiting some or all deferred variable reward immediately, rather than waiting until a vesting milestone,” it said.
“In addition, prior to any vesting of deferred awards, the Board will conduct a review of individual and company performance to ensure the performance has been sustained over the longer term and progress has been made towards the key strategic objectives,” it said.