Australian Minister Chris Bowen plans to introduce extensive executive remuneration reforms designed to force boards to be more accountable and give shareholders more power, including the “two strikes” proposal, which will strengthen the non-binding vote on remuneration and set out consequences where companies do not adequately respond to shareholder concerns on remuneration issues as follows:
- 25 per cent ‘no’ vote on remuneration report triggers reporting obligation on how concerns addressed; and
- Subsequent ‘no’ vote of 25 per cent activates a resolution for elected directors to submit for re-election within 90 days.
A claw-back provision would require a director or executive to repay to the company any bonuses calculated on the basis of financial information that subsequently turned out to be materially misstated. (Australia Looking to Take Say-on-Pay One Step Further, TheCorporateCounsel.net/Blog, 4/27/10)