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Executive remuneration is a key concern for Australian and multi-national employers and involves complex legal and regulatory issues.
Not only do we have a deep and thorough understanding of these issues, but we also appreciate the importance of the commercial environment our clients operate in and the need to take into account different stakeholder interests (including boards, executives, regulators and shareholders).
We always consider the bigger picture when advising clients on executive remuneration arrangements, which means thinking ahead about how the legislative and regulatory regime might apply and the consequences for both employer and employee (particularly on termination). We know that a properly considered approach early on can make all the difference.
The core employment expertise our team brings is part of a fully integrated multi-disciplinary service which includes experts in Australian securities, corporate and tax law. As a result, we are best placed to advise Australian and multinational clients on their executive remuneration arrangements.
Our work includes advising on recruitment and retention strategies, drafting senior executive employment agreements and director appointment letters, advising on the applicable Listing Rules and Corporations legislation – particularly, Australia's complex retirement benefit rules, structuring incentive plans (equity or cash based) with specific regard to the interaction with employment termination provisions and good leaver / bad leaver arrangements, continuous disclosure, preparing shareholder documentation, including notices of general meetings, and advising on and defending legal claims by employees arising out of their participation in incentive plans (particularly equity based schemes).
Our Australian team is supported by colleagues in our London office who are also experienced and well-versed in the Australian legal issues arising from all aspects of executive remuneration. Through its referral network with the UK’s premier law firms and employee benefit consultants, our London team regularly advises some of the world’s largest organisations on their remuneration structures and employee incentive offerings.
The PRC Supreme Court recently issued its Interpretation on several issues related to labour dispute cases effective from 1 February 2013. The Interpretation clarified several matters relating to labour law such as service year calculations for employees transferred from one entity to another one, non-compete restrictions, notification requirements of trade unions for early termination of employment, employment of foreign nationals and the validity of change of labour contracts orally.
On 22 January 2013, the PRC Supreme Court issued a judicial interpretation for criminal cases related to the non-payment of employees' remuneration. The Interpretation has clarified certain aspects of the criminal sanctions that may apply for the non-payment of employees' remuneration, increasing the risk of prosecution for non-compliance.
2011 was a landmark year for listed companies, with the 1 July 2011 commencement of the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 triggering changes in the way that AGMs are conducted. In this article, we review the 2011 season and discuss practical steps you can take for your company's AGM in 2012. (For detailed discussion of the impact of the 'two strikes' rule, please see our article 'Did you receive a strike, or comments, on your remuneration report in 2011?', also in this issue).
Yesterday, the Consumer Credit and Corporations Legislation Amendment (Enhancement) Bill 2011 (Bill) was introduced into the House of Representatives. If passed, the Bill will amend the Corporations Act 2001 to establish that the chair may lawfully vote undirected proxies on the resolution to adopt the remuneration report. But the proxy appointment must expressly authorise the chair to exercise the proxy, in accordance with a formula stated in the new provision.
The Corporations Amendment (Improving Accountability on Executive Remuneration) Bill 2011 (Bill) passed the Senate on the evening of 20 June 2011, without further amendment. It is now awaiting assent. Amendments relating to proxies and to voting by key management personnel on remuneration matters commence on 1 August 2011, and the remainder of the Bill's provisions commence on 1 July 2011.
The Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011 (Cth) passed through the House of Representatives on 12 May 2011, and will now progress to the Senate. There were two developments worthy of note during the passage of the Bill through the House.
This morning, the Federal Government released draft legislation and regulations to implement its 18 March 2009 announcement that golden handshakes will be capped at one year's base salary. The changes envisaged in the exposure draft of the Corporations Amendment (Improving Accountability on Termination Payments) Bill 2009 (and associated Regulations) are significant.