Executive Pay and Loyalty

Intl - Australia

Equity Compensation
Golden Handshakes

Say on Pay - see generally: Binding Say on Pay
Analysis:
  • "Two Strikes" Rule Working [in Australia], with Glass Lewis reporting "Although over 100 companies faced the grim prospect of a “second strike”, only 13 companies actually received a “second strike” in the recently completed Australian proxy season (and only 2 had their board spill resolution approved). This seems to indicate that shareholders are taking this newly-granted responsibility quite seriously. Furthermore, companies are as well , as indicated by the increased dialogue and subsequent policy and design reform."
  • "Australia's 'Two Strikes' Law Gains Force" (2012.12.03) - Blog by CFA Institute
  • Twelve Australian Companies Receive First Strike Votes -- ISS Blog (11/18/2011)
  • Two-Strikes Law - Will It Curb Executive Pay (10/24/2011)
Legislation Proposed.  See Business Insider News Report (2011.3.3), reporting that the bill would give "shareholders the opportunity to remove directors if the company’s remuneration report has received a ‘no’ vote of 25 percent or more at two consecutive annual meetings."
Shareholder Approval
  • 2012.June.2  "CEO pay revolt threatens Xstrata merger" (BusinessDay), which begins "XSTRATA shareholders are threatening to scupper a $US90 billion ($93 billion) friendly merger with Glencore after scheme documents revealed the chief executive, Mick Davis, stands to collect up to £75 million ($119 million) over the next three years, including retention payments without any performance hurdles." More info directly below.
  • 2012.May.31  M&A Closing "At Risk" from Aussie Shareholder Approval Requirement for Retention. Also r See  See also the Wall St. Journal in the article titled "Retention Tension Risks Xstrata-Glencore Deal" reporting that -- 
    • "Shareholders already feel Xstrata's executive pay is too high: 37% of them voted against the company's 2011 pay package at its recent annual general meeting. The retention package needs approval from 50% of shareholders to pass, but Glencore can't vote, meaning only 33% of Xstrata's shareholders are required to vote it down." 
    • "If that happened, it would lead to the whole merger being called off—which raises the stakes for investors supportive of the deal but not of the pay package." 
Stock Award Plans
  • 2012.Aug.8  Compliance Issues for Multi-national Employers -- see DLA alert (noting the availability of a securities law exemption if stock award grants will be made to less than 20 employees over 12 months, or only to executive officers).