Executive Remuneration Insights

Executive Remuneration Insights

The past year has seen the ongoing evolution, rather than revolution, of executive pay for listed companies in Australia.

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There continues to be, in our view, a tendency for 'vanilla' approaches to executive remuneration designed not to raise the ire of proxy advisors and shareholders as the result of the two-strikes rule.

We hear from Non-Executive Directors that there is an unhealthy risk aversion amongst boards, created in part by regulation, lack of diverse thinking and public focus on those that stand out from the crowd.

The real insight however is not in the data, but to challenge whether following best practice (which is likely to really be prevailing practice) will achieve the desired results and engagement from executives and drive long term increases in shareholder value.

The first KPMG Executive Remuneration Insights report details the current executive remuneration practices and related topical issues in Australia and overseas to help Non-Executive Directors and management create a remuneration strategy that supports its unique business strategy.

Key insights

  • There was little change in remuneration levels for CEOs and CFOs in FY15 within the ASX 100
  • Short term incentive (STI) deferral is on the rise with 75 percent of the ASX 100 using an STI deferral feature
  • The most significant change to the US executive compensation landscape is the pending introduction of the pay ratio disclosure requirements
  • One in four executive directors in the FTSE 350 in the UK received no salary increase, which is the highest level of pay freezes in the last 4 years.

Performance & Reward

Performance & Reward

KPMG’s Performance & Reward team brings an experienced and practical approach to assisting boards and senior management with remuneration strategy.

Executive Search & Selection

Executive Search & Selection

Our team works in partnership with clients in the areas of executive search, executive selection, due diligence, recruitment and remuneration advice.

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