Sydney - Severance payments worth more than a year's base
salary would need shareholder approval under proposed changes
outlined Wednesday by Australian officials.
'The community has been rightly offended by the excessive golden
handshakes in firms where directors and executives are rewarded for
poor company performance,' Treasurer Wayne Swan said.
'The government's reforms will empower shareholders to more easily
reject such payments where they are not in the interests of the
company, the shareholders or the community,' he said.
Under current law, there is no need for shareholder approval until
a termination payment is valued at more than seven times a base
salary.
The move came after US President Barack Obama pledged to claw back
millions of dollars in performance bonuses paid to executives of
American International Group Inc after the insurance company received
a taxpayer bail-out of 180 billion US dollars.
Australian Shareholders Association head Helen Dent welcomed the
move, saying it was 'definitely a step in the right direction.'
She said a survey in February found 90 per cent of 1,611
respondents believed executives of listed companies received
excessive pay.
Dent said it simply wasn't true that lots of senior executives
would leave their employers and work overseas unless they were paid
huge bonuses.
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