Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

Today the Treasurer and I announced a package of major reforms that will curb the level of what are known as golden handshakes. The community has been rightly offended by the level of the termination payments that have been made over the past decade in particular. These are commonly known as golden handshakes. This is unacceptable when we see workers losing their jobs. We see rewards for failure via these massive golden handshakes that have developed over the past decade. They are often made as a reward for failure. Today’s reforms that have been announced will empower shareholders. There will be a binding vote. Earlier today I described this new culture and said that the retirement gold watch has been replaced with a truckload of gold bullion in the executive payouts cases we are seeing on termination.

I will go to the key reforms that we have announced today. Under the current law that was left to us by the former Liberal government, who did nothing, only where the pay for company directors is seven times their total pay package do they need to seek shareholder approval. We are reducing that to be only one times that amount. We are also reducing the base pay from the salary package to the basic pay. There will be two major changes to the way in which these payments are calculated. Secondly, the Liberals’ law only applies to company directors. We will be expanding the coverage of these new requirements to include all those executives in the company remuneration package. Thirdly, we have identified a loophole that was left to us by the Liberal Party. (Time expired)