The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

4 January 2010

NO.001

Joint Media Release
with
Senator The Hon Nick Sherry
Assistant Treasurer
and
The Hon Chris Bowen MP
Minister For Financial Services, Superannuation And Corporate Law

Government Welcomes Productivity Commission Report
on Executive Remuneration

The Government welcomes the Productivity Commission's final report on Australia's director and executive remuneration framework.

The Government commissioned the inquiry in March 2009, as part of its broader response to curb excessive remuneration practices.

Following extensive public consultation, the Commission's inquiry has concluded that Australia's corporate governance and remuneration framework ranks highly internationally, but recognises that there is scope to further strengthen Australia's remuneration framework. The report contains a number of innovative recommendations to achieve this aim.

These recommendations are designed to improve board capacities, reduce conflicts of interest, encourage stakeholder engagement and improve relevant disclosure and to ensure well conceived remuneration policies.

"The Government will now consider the PC's recommendations and intends to respond during the first quarter of 2010," Mr Bowen said.

"The Government understands fully the community's concerns about excessive executive pay that rewards reckless risk taking. That's why we are committed to ensuring that executive pay regulation is in line with community expectations as well as international best practice," Treasurer, Wayne Swan said.

As part of this commitment, the Government has taken steps to strengthen a number of other aspects of Australia's executive remuneration framework.

"Recently, the Government enacted reforms to empower shareholders to reject excessive termination benefits given to company directors and executives when they depart a company," Mr Bowen said.

The Commission's report also complements work that the Australian Government has been engaged in through the G20 which is being implemented by the Australian Prudential Regulation Authority (APRA) in respect of Australian financial institutions.

The Commission's final report is available at www.pc.gov.au.

4 January 2010