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CORPORATIONS AMENDMENT (IMPROVING ACCOUNTABILITY ON TERMINATION PAYMENTS) BILL 2009

Order read for the further consideration of the bill in committee of the whole.

In the committee

Consideration resumed of the bill.

Senator Xenophon moved the following amendment:

 Schedule 1, page 10 (after line 27), after item 32, insert:

 32A At the end of section 200F

  Add:

   Certain exceptions cease to operate

  (6) Subsections 200F(2), (3) and (4) cease to have effect 36 months after the commencement of Part 1 of Schedule 1 of the Corporations Amendment (Improving Accountability on Termination Payments) Act 2009, unless their operation is continued or varied by a subsequent Act of Parliament.

   Note: Subsections 200F(2), (3) and (4) provide exceptions to the member approval requirement for benefits that do not exceed one year's base salary.

Debate ensued.

Question—That the amendment be agreed to—put.


The committee divided—

AYES, 36

Senators—

Abetz

Bernardi

Birmingham

Boyce

Brandis

Brown, Bob

Bushby

Cash

Coonan

Cormann

Eggleston

Ferguson

Fielding

Fierravanti-Wells

Fifield

Fisher

Hanson-Young

Humphries

Johnston

Joyce

Kroger

Ludlam

Mason

McGauran

Milne

Minchin

Nash

Parry (Teller)

Payne

Ryan

Scullion

Siewert

Troeth

Trood

Williams

Xenophon

NOES, 25

Senators—

Arbib

Bilyk

Bishop

Brown, Carol

Cameron

Carr

Collins

Conroy

Crossin

Farrell (Teller)

Feeney

Forshaw

Furner

Hurley

Hutchins

Lundy

Marshall

McEwen

McLucas

O'Brien

Polley

Pratt

Stephens

Sterle

Wortley

Question agreed to.

The Leader of the Australian Greens (Senator Bob Brown) moved the following amendment:

 Schedule 1, page 13 (after line 2), after item 40, insert:

 40A At the end of Division 2 in Part 2D.2

  Add:

 

200K Executive benefits must comply with remuneration policy

  (1) An entity mentioned in subsection (2) must not give a person a benefit in connection with a person (the manager or executive) holding a managerial or executive office unless:

 (a) there is member approval under section 200M for a remuneration policy that covers the giving of such a benefit; and

 (b) the benefit meets the requirements of that policy.

   Note 1: The recipient of the benefit need not be the manager or executive.

   Note 2: Managerial or executive office has the meaning given by section 200AA.

  (2) The entities are as follows:

 (a) the company;

 (b) an associate of the company (other than a body corporate that is related to the company and is itself a company);

 (c) a prescribed superannuation fund in relation to the company.

  (3) In this section:

   superannuation fund means a provident, benefit, superannuation or retirement fund.

 


200L Remuneration policy

   Remuneration policy

  (1) A remuneration policy proposed for member approval under section 200M must:

 (a) outline the objectives and structure of executive remuneration arrangements generally; and

 (b) outline the objectives and structure of executive remuneration arrangements in relation to the following kinds of benefits:

 (i) benefits connected to appointment or engagement of a person, however described;

 (ii) annual base salary;

 (iii) benefits relating to performance or bonuses, however described;

 (iv) superannuation entitlements which exceed statutory requirements;

 (v) benefits connected to a person's retirement;

 (vi) benefits of a kind prescribed by the regulations for the purposes of this section; and

 (c) address any other matters prescribed by the regulations.

   Use of consultants

  (2) If, in any financial year, an entity engages the services of consultants of any description in the formulation of:

 (a) a remuneration policy; or

 (b) remuneration packages under such a policy;

   the directors' report required for that financial year under section 298 must set out:

 (c) which consultants were hired and for what purposes; and

 (d) how much each of the consultants was paid for their services.

 

200M Approval of remuneration policy

  (1) The remuneration policy, and any revision to that policy, must be approved by a resolution passed at a general meeting of:

 (a) the company; and

 (b) if the company is a subsidiary of a listed domestic corporation—the listed corporation; and

 (c) if the company has a holding company that:

 (i) is a domestic corporation that is not listed; and

 (ii) is not itself a subsidiary of a domestic corporation;

  the holding company.

  (2) Details of the remuneration policy must be set out in, or accompany, the notice of each meeting that is to consider the policy.

  (3) The requirements of this section are in addition to, and not in derogation of, any other law that requires disclosure to be made with respect to giving or receiving a benefit.

  (4) Member approval of a remuneration policy under this section does not relieve a director of a body corporate from any duty to the body corporate (whether under section 180, 181, 182, 183 or 184 or otherwise and whether of a fiduciary nature or not) in connection with the giving of any benefit.

   


200N Benefits to be held on trust and repaid

  (1) If an entity (the giver) contravenes section 200K by giving to a person (the recipient) a benefit that is not covered by a remuneration policy for which there is member approval under section 200M, then the amount of the benefit, or the money value of the benefit if it is not a payment:

 (a) is taken to be received by the recipient on trust for the giver; and

 (b) must be immediately repaid by the recipient to the giver.

  (2) An amount repayable under subsection (1) to the giver:

 (a) is a debt due to the giver; and

 (b) may be recovered by the giver in a court of competent jurisdiction.

  (3) Subsection (1) applies to the whole of the amount of a payment or of the money value of the benefit even though giving the benefit would not have contravened section 200K if that amount or value of the benefit had been less.

Note 1: The heading to Part 2D.2 is altered by omitting "termination payments " and substituting "termination and other payments ".

Note 2: The heading to Division 2 is altered by omitting "termination payments " and substituting "termination and other payments ".

Debate ensued.

Question—That the amendment be agreed to—put and negatived.

Bill, as amended, agreed to.

Bill to be reported with an amendment.

The Acting Deputy President (Senator Bernardi) resumed the chair and the Temporary Chair of Committees reported accordingly.

On the motion of the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) the report from the committee was adopted and the bill read a third time.