I am looking at an annual remuneration report and am confused about how options are treated on the P&L and also how the non recourse loans work.
As a novice, the FIXED component is ATTENDANCE money!
The STI and LTI are blackmail incentives to get them off their backside to perform the duties expected by the majority of shareholders.
Note, I mentioned SHAREHOLDERS and not SHAREHOLDINGS.
The current system in theory could work effectively if the irrational exuberance of the Top 20 was tempered by allowing the majority shareholders have an effective say.
Just look at a few major companies Top 20 shareholders and think about the similar way they pass and justify their rewards. In the majority of ASX companies the inherent swamping affect of the poll voting system, denies the majority of shareholders an effective voice.
The Chairman of NAB, confirmed at the Royal Commission that KMP don’t need to meet the metrics to get their rewards. It is at the discretion of the Board!
Prior to the RC, I pointed out my suspicions on a number of occasions that the Institute of Directors use the Corp Act for their self serving interest.
Warren Buffets rewards system is less prone to manipulation
Sorry, it didn’t answer your questions but this is the true state of our sharemarket.
It is the major reason for the very low participation rate of eligible shareholders bothering to vote compared to the UK or the US - our participation rate is between 4-5%.
