Time to re-arrange the deck chairs

The Chartered Secretaries Australia is reported to have conducted a survey which has discovered the big end of town is finding it necessary to tinker with the compensation packages.

"SHAREHOLDERS' increasing propensity to vote against increases in corporate remuneration has changed the way Australia's top companies approach their payments to directors, a survey has found. Polling of the top 200 companies revealed almost 90 per cent of them would be concerned if 20 per cent of their shareholders voted against the remuneration report, the Chartered Secretaries Australia research found.

The non-binding vote, based on the UK model, was introduced this year, and while companies are not forced to change their remuneration, they are listening to what their shareholders have to tell them.

"It has been the issue for the 2005 AGM season," Melbourne University's Professor of Commercial Law, Ian Ramsay, said. "Companies are clearly sensitive to this issue. We've seen a number of companies rethink their remuneration - obviously sometimes after the vote - and we've also seen companies amend their remuneration plans before the AGM by informal polling of institutional shareholders." A significant protest vote against remuneration was very embarrassing for a company, Professor Ramsay said.

Investa's managing director, Chris O'Donnell, said his company was surprised by the high vote against its report and said changes had been introduced to ensure it did not occur again.

"It highlighted there was some difference between our view and the investment community and we will work with them to adjust the remuneration structure, so we are more in keeping with what the investors are looking for," he said. Investa did not change its 2005 remuneration...."

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