Parliamentary secretary flags reforms to executive remuneration

In a speech to the Australasian Investor Relations Association Conference on 26 November 2010, Parliamentary Secretary to the Treasurer, David Bradbury indicated that he proposed "in the coming weeks" to release draft legislation to implement the reforms stemming from the Productivity Commission inquiry.

According to the speech, the draft legislation will include:

• the controversial "two strikes" test in relation to remuneration report approvals (potentially forcing a board spill if remuneration reports are voted down twice);
• increasing "transparency of the use of remuneration consultants";
• simplifying remuneration report disclosures;
• prohibiting hedging of executive remuneration;
• a new proposal to "claw back" remuneration in the event of a material misstatement in a financial statement.