How do we rebuild shareholder trust on executive pay

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Welcome to PwC’s fourth annual Executive Remuneration publication Executive remuneration has been through yet another period of turbulence. The global financial crisis acted as an impetus for intensified scrutiny and has precipitated action by a broader range of stakeholders. In Australia this has included legislative amendments, a Productivity Commission inquiry, greater regulation by APRA in the financial services sector, and a continued increase in “No” votes on remuneration reports. While the global financial crisis may be finite, it has resulted in a permanent shift in the way remuneration is perceived. It has prompted fundamental questions about the links bet<strong>we</strong>en the reward model and individual and company performance, as <strong>we</strong>ll as recognising the importance of risk in all aspects of reward. The spotlight has turned to ‘how’ remuneration arrangements and processes are designed and governed, as <strong>we</strong>ll as evaluating the resulting outcomes against company performance. In particular, roles and accountabilities are being re-examined for the board, the remuneration committee and management, and across the HR/reward, finance, risk and strategy functions. This year our publication provides a perspective on the impact of this evolving environment, offers some alternative views to provoke discussion, and suggests ways to manage the often competing demands of multiple key stakeholders. We believe that over the next five years <strong>we</strong> will see some very significant changes in executive remuneration, particularly in design, performance measurement and governance. So <strong>we</strong> suggest that now is the time to act to ensure you are <strong>we</strong>ll placed to meet those challenges. We hope you will find this publication thought-provoking and an aid to your preparation.
xxxxxxxxxxxxxxxxxxxxxx Contents Breaking the mould 2 Risk and reward 10 Aligning reward to performance is an old idea… or is it? 16 Regulation, regulation and more regulation… sometimes less is more 20 Who wants to be the chair of a remuneration committee? 26 Being independent 32 Choppy waters 36 A look in the rear-vision mirror: ASX 100 remuneration in 2009 40 PricewaterhouseCoopers Executive Remuneration – Fourth Edition 2010 |
Page 1: Executive Remuneration Fourth editi
Page 5 and 6: Breaking the mould The increasingly
Page 7 and 8: Breaking the mould “What about pe
Page 9 and 10: Breaking the mould sharehol
Page 12 and 13: Risk and reward Globally, during th
Page 14 and 15: Risk and reward So what can be <str
Page 16: Risk and reward 1. 2. . . Understan
Page 19 and 20: Aligning reward to performance is a
Page 21 and 22: Aligning reward to performance is a
Page 23 and 24: Regulation, regulation and more reg
Page 25 and 26: Regulation, regulation and more reg
Page 28 and 29: Who wants to be the chair of a remu
Page 30 and 31: Who wants to be the chair of a remu
Page 32: Who wants to be the chair of a remu
Page 35 and 36: Being independent The perception an
Page 37 and 38: Remuneration committees need to bec
Page 39 and 40: Choppy waters It is clear from the
Page 41 and 42: Choppy waters 6. Get shareh
Page 43 and 44: A look in the rear-vision mirror: A
Page 45 and 46: A look in the rear-vision mirror: A
Page 48 and 49: Appendix 1: Productivity Commission
Page 50 and 51: Appendix 1: Productivity Commission
Page 52 and 53:
Appendix 1: Productivity Commission
Page 54 and 55:
Appendix 2: The APRA remuneration a
Page 56 and 57:
Appendix 2: The APRA remuneration a
Page 58 and 59:
Our Team Our People and Change team
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How do we rebuild shareholder trust on executive pay

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