International Law

Executive remuneration structures for APRA?regulated institutions

In October 2008, the Prime Minister announced that the Government would be examining with the Australian Prudential Regulation Authority (APRA) what domestic policy actions on executive remuneration would be appropriate to avoid excessive risk?taking in Australia?s financial institutions. APRA has now announced its intended approach.

APRA is developing a principles?based framework for executive remuneration structures and, in particular, on the incentives built into these arrangements that would apply to APRA?regulated institutions. These institutions cover a range of corporate structures including listed and unlisted companies, mutually owned organisations, locally owned and foreign?owned companies and branches of foreign companies.

APRA anticipates issuing a discussion paper in the second quarter of 2009. The paper will invite submissions from interested parties.

After considering submissions received, APRA will issue a response paper along with draft principles and guidance to be applied by the boards of APRA?regulated institutions. This second set of published material, more detailed than the first, will give another opportunity for submissions before APRA finalises its approach, expected to be during the second half of 2009.

Full post as published by Australian Regulatory Compliance Review on December 10, 2008 (boomark / email).