The BCA has lodged a submission with the Treasury in relation to its discussion paper titled The Clawback of Executive Remuneration where Financial Statements Are Materially Misstated.
The discussion paper examines whether there should be changes to make it easier for shareholders and companies to ‘claw back’ executive remuneration, such as bonuses paid to directors and executives, in the event of a material misstatement of the company’s financial statements. This issue was not considered in the recent report of the Productivity Commission into executive remuneration.
We do not believe a case has been made as to why the present provisions of the law are not adequate.
We also believe that it would be very difficult to design provisions in any law that could apply without serious unintended consequences.
Remuneration practices are not ‘one size fits all’, which makes it very difficult to come up with reforms that can cover off all contingencies in a way that is balanced and fair.
While we oppose the reforms, in our submission we have considered how the reforms should be implemented if the government proceeds.