Executive Remuneration and Performance Measurement at ANZ Limited: A Critical Analysis

1144 FINANCE

Executive Criteria
The report is based on the ANZ Limited with respect to the remuneration that is being provided
to the Executives and directors of the company. There have been instances that the shareholder
value has declined but still the remuneration to the directors and executives has increased. There
is inclusion of the criteria for providing the Short-term incentive and long term incentive that are
being provided to the executives of the company as in this case the performances as well as some
qualitative factors are key components for the calculation of the incentives. There is assessment
of the performance of the company through the various tools and techniques such as the return
on equity, Return on investment, EPS etc. There is analysis of the remuneration with respect to
the share price of the company and whether there is inverse relation between them. There is also
measurement of the ways through which the performance is measured along with the goals and
objectives of the organisation which is to provide the maximum value to the shareholders. The
research is also being conducted on the basis of the different articles along with the comparison
of the performance.

Table of Contents
Executive Criteria..........................................................................................................................2
Introduction....................................................................................................................................5
LO (a) LO (b).................................................................................................................................6
1...................................................................................................................................................6
2...................................................................................................................................................7
3...................................................................................................................................................8
4...................................................................................................................................................9
5.................................................................................................................................................10
LO ( C)..........................................................................................................................................11
1.................................................................................................................................................11
2.................................................................................................................................................12
3.................................................................................................................................................13
4.................................................................................................................................................14
5.................................................................................................................................................17
6.................................................................................................................................................18
7.................................................................................................................................................19
8.................................................................................................................................................20
9.................................................................................................................................................21

Summary of the findings.............................................................................................................22
References.....................................................................................................................................23

Introduction
There is the inclusion of the detailed remuneration policies that are being followed by the ANZ
limited. The Components of the remuneration policy are also stated in the report for determining
how the calculation is being done for the executives. The criteria and eligibility for the short-
term incentive and long-term incentives are also being included in the report. The performance
measures quantitative as well as qualitative are provided to understand the remuneration
provided by the committee. The changes in the remuneration policy of the company are also
being stated and the factors that have led the company to reconsider the remuneration of the
executives. The calculations of different ratios are also being conducted for the measurement of
the performance along with the relation between the remuneration paid to the employees and the
performance. There is the inclusion of detailed process of the remuneration that is being
provided to the directors and executives of the company.

LO (a) LO (b)
1. Details for remuneration committee and its membership.
The remuneration of the directors and executive is based on the performance of the company.
The performance is measured on the basis of the targets and long-term goals that are achieved by
the organization annually. The remuneration report covers the Non-executive directors, Non-
Executive Director (Former) as well as the Chief executive officer (CEO) and Disclosed
Executives – Current (ANZ, 2018). Remuneration provided is based on the fixed and variable
framework designed by the board in which the variable is based on the performance that is
achieved. The performance is assessed by the board of members of the company. It can be seen
that the performance of the company increased with the adoption of the strategies leading to
better and efficient capitalization. There was also the effective management of the cost which
resulted in the better portfolio and returns. The achievement of the performance individually as
well as a whole group led to the changes in the remuneration of the Directors and executives.
The average remuneration was about 96% for the year 2017. The non-achievement of the target
to provide the return to the shareholder led to the cancellation of the rights that were provided in
the year 2013 after the testing in the year 2016 (ANZ, 2018).