The Business Council of Australia has made a submission to Treasury regarding the exposure draft of the Corporations Legislation Amendment (Remuneration and Other Measures) Bill 2012, highlighting that it does not support the Bill in its current form.
The exposure draft includes a number of proposed amendments, including:
- listed disclosing companies to disclose details of present pay, future pay, and past pay for key management personnel (KMP)
- listed disclosing companies whose financial statements have been materially misstated to either disclose whether any overpaid remuneration to KMP has been ‘clawed back’, or if no reduction, repayment or alteration of overpaid remuneration has been made, an explanation of why not.
The BCA submission argues that:
- the requirement for disclosure of past, present and future pay is likely to increase compliance burden, without providing additional clarity for investors
- reporting of past, present and future pay has not been thoroughly tested with stakeholders
- clawback provisions would be better dealt with outside legislation.
We recommend that the government remove the proposed amendments for companies to disclose present, future and past pay for KMP, and request that the ASX Corporate Governance Council address the issue of clawback of overpaid remuneration due to financial statements being materially misstated, in the forthcoming update of its Corporate Governance Principles and Recommendations.
Submission to the Treasury regarding the Corporations Legislation Amendment (Remuneration Disclosures and Other Measures) Bill 2012 Exposure Draft