STOCK EXCHANGE
Show us the money
The New Zealand Stock Exchange (NZX) is heightening its expectations for disclosure of executive and director pay for publicly listed companies. As part of a major overhaul of its corporate governance code of best practice, it proposes that companies have a remuneration policy showing the proportion of executive pay made up of cash, short-term and long-term performance bonuses and what performance criteria need to be achieved for those payments to be made.
For chief executive pay, companies will be expected to show actual amounts paid, broken down into base salary and short- and long-term bonuses. The amounts paid to each director will also need to be disclosed.
NZX head of policy Hamish Macdonald says the goal of the overhaul is to move New Zealand’s disclosure requirements closer to overseas stock exchanges, “without lurching too far” to prescriptive Australian-style requirements, which include a shareholder vote on remuneration reports – if more than 25% of shareholders vote against the remuneration report in two consecutive annual meetings, there can be a vote for the re-election of the board.
The NZX rules also stop short of requiring companies to disclose the ratio of chief executive pay and wages paid to the company workforce, as is being explored in the UK corporate governance review.