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Shareholders award pay performance.

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Media Release

Penny Wong Labor Senator for South Australia Shadow Minister for Employment and Workforce Participation, Corporate Governance and Responsibility

Thursday 3 November, 2005


"Shareholders are taking the opportunity to have their say on the appropriateness of executive pay," Shadow Minister for Corporate Governance and Responsibility, Senator Penny Wong said today.

"Labor strongly supported a shareholder vote on executive remuneration and is encouraged by the participation levels so far this AGM season," said Senator Wong.

"A major reason for our support of the non-binding vote was that linkages between executive pay and performance were not always clear.

"Shareholder pressure is now rebuilding the link between pay and performance.

"Interest free loans, excessive termination benefits and incentive schemes that are not aligned to performance are all problematic and shareholders deserve the right to say so - it is their money.

Senator Wong noted that there have been vote abstentions in a few company AGM's.

"Any reasonable board should be finding out why there were abstentions on the non-binding vote and do something about the concerns of those shareholders.

"Shareholders don't abstain from remuneration votes because they are delighted with what they see. At best they are keeping their concerns to themselves.

"And if institutional shareholders have concerns about remuneration packages, they should work with boards early to resolve any issues and then vote their proxies at the AGM.

For further information:

• Nathan Fabian 02 6277 5789