BHP call for executive pay rules to be simplified

BHP Billiton has called for Australian executive pay disclosure laws to be simplified.

The company has proposed annual reports should feature a single figure showing actual pay for each director, the AFR reported.

The change has already been adopted by the United Kingdom.

However, new regulations brought in by the Gillard government will require actual pay figures to be disclosed in multiple sets of figures for each director.

“Under the Australian approach, shareholders will be faced with two sets of pay numbers for each executive. This will be confusing and unhelpful for many investors,” BHP vice-president governance Geof Stapledon said in a submission to the federal government’s corporate law adviser, the Corporations and Markets Advisory Committee.

CAMAC is currently examining how to improve pay disclosure in annual reports, prompting BHP to call for a “co-ordinated review” of all reporting rules.

And they’re not alone.

The Group of 100 (G100) who represent many chief financial officers from around the country are currently urging CAMAC to also regulate the growing proxy industry, which provides advice to institutional investors on how to vote at annual meetings.

In a statement on their website, G100 said “proxy advisors, and the institutions that engage their services, should be subject to codes of behaviour for their respective operations along the lines of the Stewardship Code in the United Kingdom”.

However, proxy company Ownership Matters said there is “no empirical evidence produced to back claims concerning the negative influence of proxy advisory firms”.

“There is no evidence of any dysfunction in the proxy advisory market and OM notes the Productivity Commission’s findings in this regard,” its submission says.

The Australian Council of Superannuation Investors agrees, saying there is no need for further regulation of proxy advisers as those that provide voting recommendations already hold Australian Financial Services Licences.

CAMAC is expected to discuss submissions at the end of the month and will hold a roundtable meeting later in the year.

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