By Ruth Williams
THE Productivity Commission says it will today deliver a ''robust'' set of suggested reforms to executive pay, after nine months of scrutiny, nine days of public hearings, 170 submissions and a 360-page draft report that sparked heated debate in corporate Australia.
The commission's landmark report on executive remuneration will be handed to the Federal Government today, amid speculation on whether some of the more contentious of its 15 draft recommendations, unveiled in September, would be revised.
The Federal Government charged the commission with investigating executive remuneration in March, in response to what Treasurer Wayne Swan described as ''significant community concern'' on ''excessive'' pay practices of some Australians companies.
It was unclear yesterday when the report would be made public. Although the Government is required to release it after 25 parliamentary sitting days - potentially pushing it into May - it is expected to be released much earlier.
The commission's draft report included several controversial proposals, most notably the ''two strikes'' plan to beef up the non-binding vote of shareholders on a company's remuneration report.
Productivity Commission chairman Gary Banks said yesterday that there had been a ''very good'' response to the draft report. ''We received an extra 70 submissions on top of the 100 before our draft and many groups turned up at our public hearings,'' he said. ''This has helped us a lot in finalising our report to Government. On most issues, including our two-strikes proposal, there was a range of reactions.
''Out of all this I think we have been able to come up with a robust set of final recommendations.''
Under the ''two strikes'' proposal, boards whose remuneration reports received ''no'' votes of more than 25 per cent would be required to report back on whether shareholders' concerns have been resolved. If the remuneration report garnered a significant ''no'' vote the following year, all board members would face re-election.
It was a suggestion that sparked outcry from the corporate sector, which warned that it would give too much power to minority shareholders and would discourage directors standing for boards. It was also opposed by proxy advisers RiskMetrics, which labelled it a ''solution in search of a problem'' at one public hearing.
The Australian Securities Exchange said it could give ''undue influence'' to minority shareholders and lead to high-performing directors leaving the board rather than face re-election. It suggested raising the voting threshold for both ''strikes'' to 50 per cent, and changing the plan so that the second ''strike'' would not automatically lead to a board spill.