Australia: strengthening 'say on pay' - 'two strikes and re-election'

In December last year the Australian Treasury published for consultation a draft of the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011: see here (pdf) and, for an explanatory memorandum, here (pdf). One of the aims of the Bill is to strengthen the current advisory vote regarding remuneration by introducing a 'two strikes and re-election' process, described in the memorandum thus (paragraphs 1.8 and 1.9):

The ‘first strike’ occurs where a company’s remuneration report receives a ‘no’ vote of 25 per cent or more. Where this occurs, the company’s subsequent remuneration report must explain whether shareholders’ concerns have been taken into account, and either how they have been taken into account or why they have not been taken into account. The ‘second strike’ occurs where the company’s subsequent remuneration report receives a ‘no’ vote of 25 per cent or more. Where this occurs, shareholders will vote at the same AGM to determine whether the directors will need to stand for re-election within 90 days. If this resolution passes with 50 per cent or more of eligible votes cast, then the ‘spill meeting’ will take place within 90 days".

The consultation period ended last month.  Consultation responses were published today: see here.