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Australian government announces proposed changes to remuneration report requirements

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22 Feb 2012

The Australian Federal Government has announced proposed changes to the Corporations Act to amend the remuneration report requirements.

Under the Australian Corporations Act 2001, certain entities are required to prepare a remuneration report outlining, among other things. the entity's remuneration policy and details of key management personnel remuneration.  The requirements rely on accounting standards for certain definitions and measurement of disclosed remuneration.

Changes proposed include:

  • to require listed companies to disclose to shareholders through the remuneration report the steps they have taken to clawback bonuses and other remuneration where a material misstatement has occurred in relation to the company's financial statements
  • improving disclosures contained in remuneration reports, by requiring more transparent disclosure of termination payments or 'golden handshake' payments
  • unnecessary disclosure requirements will be removed to simplify remuneration reports, and clearer categorisation of pay will be introduced
  • relieving certain unlisted entities from the obligation to prepare a remuneration report
  • inserting Australian-specific disclosure requirements relating to related party transactions into the Corporations Regulations, as they are being removed from AASB 124 Related Party Disclosures (equivalent to IAS 24 Related Party Disclosures) by the Australian Accounting Standards Board (AASB).

 

Click for press release (link to Australian government website).

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