Australia: Government provides very strong support for Productivity Commission remuneration recommendations

The Productivity Commission published its report on executive remuneration last year (see here, pdf - 2.6MB). The report rejected the introduction of a cap on executive pay and a binding shareholder vote on remuneration. Instead it contained 17 recommendations designed to strengthen the corporate governance framework, including the requirement that where a company’s remuneration report receives a ‘no’ vote of 25 per cent or more of eligible votes cast at an AGM, the board should be required to explain in its subsequent report how shareholder concerns were addressed and, if they have not been, the reasons why; where the subsequent remuneration report receives a 'no' vote of 25 per cent or more of eligible votes cast at the next AGM, a resolution should be put that the elected directors who signed the directors’ report for that meeting stand for re-election at an extraordinary general meeting.

The Government's response to the Commission's report has been published - see here (pdf) - and it supports the vast majority of the Commission's recommendations.

For further information about the Productivity Commission's report see: overview (including key points) (pdf) | recommendations and findings (pdf) | Productivity Commission remuneration enquiry site | submissions | public hearing transcripts |