Remuneration is appropriate to attract, retain and motivate the directors to provide good stewardship of the company and key management personnel to successfully manage the company for the long term.
A. Explanation

This Provision encourages the use of an appropriate level of remuneration to attract, retain and motivate directors and KMP.

Although the basis of NED and executive remuneration are different (see explanations in Provision 7.1 and 7.2), their levels, however determined, should be sufficient and not excessive.

For NEDs, their remuneration should be sufficient to compensate them for their stewardship of the company. For EDs and KMP, it should be sufficient to compensate them for their long-term management of the company.

For EDs and KMP, the issue of fair remuneration is particularly important due to contemporary concerns about the growing perception of excessive levels of senior executive compensation. At the same time, the Board still needs to recognise that remuneration is a key factor in attracting, retaining and motivating the right talent.


B. Practice Guidance


C. Related Rules and Regulations
  • Nil.


D. CG Guides
  • RC Guide 3.5: Determining Non-Executive Director Fees [Non-Executive Fees].
  • RC Guide 4.2: Executive Remuneration Philosophy [Executive Remuneration].
  • RC Guide 4.3: Executive Remuneration Components [Executive Remuneration].
  • RC Guide 4.3: Executive Remuneration Levels [Executive Remuneration].
  • RC Guide 4.5: Performance Measures [Executive Remuneration].
  • RC Guide 4.6: Performance Targets [Executive Remuneration].
  • RC Guide 4.7: Remuneration and Risk Alignment [Executive Remuneration].
  • RC Guide Appendix 4C: Sample Remuneration Framework [Executive Remuneration].
  • RC Guide Appendix 4G: Common Financial Performance Measures [Executive Remuneration].
  • RC Guide Appendix 4H: Considerations in Adopting Profit Measures as Performance Measures [Executive Remuneration].
  • RC Guide Appendix 4I: Framework for Setting Performance Goals [Executive Remuneration].
  • RC Guide Appendix 4J: Mapping Remuneration and Risks [Executive Remuneration].
  • RC Guide 5.4: Plan Design [Equity-Based Remuneration].
  • Board Guide Appendix 5C: Duty to Act in Company’s Best Interests [Director Duties].


E. Related Articles




eGuide to CG Code
Definition of Corporate Governance
History and Structure of the Code
Role of the Board
Role of the Chair
Focus on Long Term and Sustainability
Revised Code Structure and Approach
Mandatory Principles
Provisions and Variations
Thoughtful and Meaningful Application
Board Matters
Principle 1
Provision 1.1
Provision 1.2
Provision 1.3
Provision 1.4
Provision 1.5
Provision 1.6
Provision 1.7
Principle 2
Provision 2.1
Provision 2.2
Provision 2.3
Provision 2.4
Provision 2.5
Principle 3
Provision 3.1
Provision 3.2
Provision 3.3
Principle 4
Provision 4.1
Provision 4.2
Provision 4.3
Provision 4.4
Provision 4.5
Principle 5
Provision 5.1
Provision 5.2
Provision 5.3
Remuneration Matters
Principle 6
Provision 6.1
Provision 6.2
Provision 6.3
Provision 6.4
Principle 7
Provision 7.1
Provision 7.2
Provision 7.3
Principle 8
Provision 8.1
Provision 8.2
Provision 8.3
Accountability and Audit
Principle 9
Provision 9.1
Provision 9.2
Principle 10
Provision 10.1
Provision 10.2
Provision 10.3
Provision 10.4
Provision 10.5
Shareholder Rights and Responsibilities
Principle 11
Provision 11.1
Provision 11.2
Provision 11.3
Provision 11.4
Provision 11.5
Provision 11.6
Principle 12
Provision 12.1
Provision 12.2
Provision 12.3
Managing Stakeholder Relationships
Principle 13
Provision 13.1
Provision 13.2
Provision 13.3
Practice Guidance
Board Roles and Director Duties
Board Composition and Guidance
Chairman and CEO
Board Membership
Board Performance
Procedures for Developing Remuneration Policies
Level and Mix of Remuneration
Disclosure on Remuneration
Risk Management and Internal Controls
Audit Committee
Shareholder Rights and Engagement
Engagement with Shareholders
Managing Stakeholder Relationships
eGuide Glossary

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