This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.  

In this Edition, we consider the downwards trend in CEO pay, transitional measures for litigation funders, recent changes to the JobKeeper scheme, the Takeovers Panel’s position on compulsory acquisition and record high for women on ASX 200 board seats.


ASX 200 CEO pay at the lowest level in six years.  Last week’s report on CEO pay in ASX 200 companies, issued by the Australian Council of Superannuation Investors (ACSI), notes a general trend downwards and in particular: (i) across the ASX 100, realised pay (that is, the value of cash and equity actually received) fell an average of 7.4%; and (ii) over time, median ASX 100 CEO fixed pay has declined from $1.95 million in FY 2012 to $1.76 million in FY 2019.  The overall average of $5.24 million in FY 2019 is the lowest recorded in the six years of realised-pay data for ASX 100 CEOs.  It is also the first time average ASX 100 CEO pay has fallen below $5.5 million.  In FY 2019, 25 CEOs had their bonuses zeroed out where performance was not adequate compared with only seven in FY 2018.  Given the widespread impact of COVID-19 on investors, staff, customers, governments and other key stakeholders, ASX boards are expected to be particularly mindful of how remuneration outcomes will be perceived externally.  Remuneration trends in 2019 indicate many boards are well positioned to respond to these pressures.  The ACSI’s report is a reminder for Directors to make sure they ‘read the room’ on executive remuneration and go beyond the ‘check-the-box’ approach to ensure pay outcomes reflect performance and the experience of the company’s investors.

Transitional measures to new regulatory regime for litigation funding schemes.  Following the Government’s announcement that it will regulate litigation funders under the Corporations Act, ASIC has implemented Instrument 2020/787 to manage the transition to the new regulatory regime for litigation funding and also issued a no-action position in relation to the obligation for funders to set up and maintain a register of members.  See ASIC’s media release for more information. We expect continued focus on the class action and litigation funding sectors over the next 12 months, with lawmakers’ attention focussed on the need to encourage certainty and confidence in the corporate sector as the country emerges from the COVID-19 pandemic.

ATO implements changes to JobKeeper employee eligibility rules.  In other pandemic-related news, the ATO has implemented changes to the JobKeeper employee eligibility rules to enable employers already enrolled in JobKeeper to receive the payment for more of their employees.  The ATO emphasises that the key date for assessing which employees are eligible for JobKeeper is now 1 July 2020, and that employees that meet the eligibility requirements can now be nominated by a new employer if their original employment with a JobKeeper employer ended before 1 July 2020. Employees can still only be nominated by one employer at any given time.  Directors of companies taking advantage of the JobKeeper payment scheme will need to actively monitor developments in the scheme, which is likely to continue to be modified in response to economic conditions. See ATO’s media release.

Takeovers Panel releases reasons for Webster decision.  In declining to make a declaration of unacceptable circumstances in Webster Limited [2020] ATP 13, the Panel considered that Winpar Holdings Limited (Winpar) had not validly objected to a proposed compulsory acquisition of Webster's shares by Henslow Acquisition Co Pty Ltd (Henslow) pursuant to the Corporations Act in circumstances where Winpar's objection was not received by Henslow within the statutory one-month timeframe.  Ultimately, having regard to the underlying policy of the compulsory acquisition provisions in Part 6A.2 and the need to have a clear and finite objection period that is able to be assessed by the 90% holder to meet its statutory obligations, the Panel found that: (i) “returning" an objection form in the context of section 664E is to be construed as when the 90% holder receives the form and not when the form is sent by the security holder; and (ii) Henslow was therefore entitled to proceed to compulsory acquisition and the circumstances were not unacceptable.  The decision emphasises that although the Takeovers Panel takes a principles-driven approach, strict compliance with Chapter 6 of the Corporations Act is still important.

ASX 200 boards reach a record 31% women.  The Australian Institute of Company Directors (AICD) reported last week that, as at 31 July 2020, women held 31.3% of ASX 200 board seats (up from 30.7% last quarter) and that only one all-male ASX 200 board remains.  Directors are reminded though that diversity goes beyond a ‘one and done’ mentality.  There are still 29 ASX 200 companies with only one female director.


Results.  This week marks the final week of what will surely be one of the most remarkable financial periods in Australian corporate history.  If there has been any take-away it is that, thanks in part to unprecedented Commonwealth fiscal support, Australian businesses outside the travel, tourism and leisure sectors have remained reasonably bouyant.  There will be several results announcements this week that will give us further insights into the possible complexion of the post-pandemic world including FMG (today), Scentre (Tuesday), WorleyParsons (Wednesday) and Afterpay and Woolworths (Thursday).  

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