Shareholders will have more power over executive perks in Australia

Shareholders will have more power over executive perks under corporate law changes proposed by Labor. Opposition corporate governance spokesman Stephen Conroy released Labor's response to the CLERP (Corporate Law Economic Reform Program) Bill number 9, which is being examined by a parliamentary inquiry.
Senator Conroy said the government's Bill failed in two main areas.

"It fails to sufficiently hold boards accountable and fails to sufficiently empower shareholders." He said corporate scandals such as HIH, Ansett and One-Tel, high salary packages to executives and termination payments in spite of poor performance, and the perceived failure of audit committees had outraged shareholders, employees and retirees.

Labor's amendments would include prohibiting limited-recourse loans to directors and key executives and banning the payment of options, bonus payments and other retirement benefits (other than statutory superannuation) to non-executive directors. They would also require shareholder approval of termination payments which exceed one year's salary and ensure the disclosure of the duration of contracts and equity value protection schemes.

"To further toughen the Bill, Labor will also move amendments in relation to audit reform, financial reporting, enforcement, shareholder activism, conflicts of interest and analyst independence," Senator Conroy said. "We believe that there needs to be a greater balance where shareholders are able to take these things into their own hands and stop the sort of excessive corporate payouts, particularly when companies have failed."

Online debate of possible reforms is being organized by the Australian Public Policy Research Network, moderated by its co-founder Dr. Richard Curtin. Anyone in the world can participate free of charge by registering on the APPRN web page. All participants are invited to vote on the importance of 14 suggested agenda items for reform that are presented in the discussion paper on 'Agendas for reforming Corporate Governance, Capitalism and Democracy' prepared by Shann Turnbull.