It is becoming more important for boards to have a clear and transparent remuneration process due to heavy scrutiny from an organisation’s shareholders, stakeholders and the media. Transparency encourages market confidence and allows comparisons between organisations.

In this director tool document, the following topics are covered:

  • Directors’ fees and executive remuneration 
  • Who determines the total amount of directors’ fees? 
  • Who approves the total amount of directors’ fees? 
  • How to allocate the total amount of directors’ fees among the directors 
  • Remuneration committees 
  • Practical matters around director remuneration.

This document largely deals with the remuneration of directors of companies under the Corporations Act 2001 (Cth) (the Act). This covers all companies listed on the Australian Securities Exchange (ASX), the vast majority of for-profit organisations and those not-for-profit organisations which have the legal structure of a company limited by guarantee. It does not directly cover payments to directors/committee members for other not-for-profits such as incorporated associations, co-operatives and government boards. However, many of the principles discussed can be applied to other forms of organisation.

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