House passes new executive salary laws
House passes new executive salary laws

A "two-strikes" test that keeps greedy company executives on their toes and hands more power to shareholders has passed parliament's lower house.

It was one of several measures that got the tick today, along with moves to crack down on potential conflict of interest issues for directors and remuneration consultants.

The "two-strikes" test was one of the key recommendations handed down by the Productivity Commission when it reviewed Australia's corporate remuneration system.

It gives shareholders the power to remove directors if the company's remuneration report receives a "no" vote of 25 per cent or more at two consecutive annual general meetings.

Parliamentary secretary to the treasurer David Bradbury said the measures were aimed at the small number of boards who had not done the right thing by their shareholders.

The Opposition tried to introduce a raft of amendments that would have seen the "no" vote threshold upped to 50 per cent, but it failed to gain support.

Mr Bradbury dismissed the changes as an attempt to emasculate the key aim of the two-strike test.

He backed the government's effort in reforming the corporate sector, having first curbed "golden handshake" payments for departing company heads in 2009.

The Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill 2011 heads to the Senate.

The West Australian

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