ACC702 Managerial Accounting: Remuneration and Performance Analysis

This report provides an analysis of executive remuneration policies, focusing on Sigma Healthcare and comparing them with Sonic Healthcare. It examines the remuneration of CEOs and CFOs, highlighting the importance of aligning remuneration with strategic priorities. The report details Sigma Healthcare's remuneration principles and equation, noting the emphasis on attracting, retaining, and motivating talent. A comparison with Sonic Healthcare reveals differences in remuneration levels and the use of equity shares as incentives. The analysis concludes that both companies aim to reward executives in ways that drive business goals. The document also includes an appendix with detailed financial information. Find more solved assignments and past papers on Desklib.

Running Head: Managerial Accounting
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Project Report: Managerial Accounting

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Remuneration report:
Introduction:
Remuneration is the payment or compensation which is received by the employers
against their services in the business. It includes the basic salary, bonuses and other
economical benefits of the business which an executive get during the employment (Richard,
Devinney, Yip and Johnson, 2009). This report focuses on the remuneration policies of
Sigma healthcare. The policies of sigma healthcare have been compared with the Sonic
healthcare to evaluate the changes and the impact. The main focus has been done on the
remuneration of CFO and CEO of the companies.
Remuneration of Sigma Healthcare:
It is essential for a business to make remuneration policies to pay the compensation
amount to the executives on a behalf. In order to make the policies of remuneration and set an
amount of remuneration, executive performance is evaluated by the business. A business is
required to measure that what amount is getting by the board of members in order to achieve
the goals of the business and failure of the business. The total amount is called remuneration.
The total remuneration of executive brief whether the particular result and efficiency of the
board of member has been maintained in the business or not (Etnier and Chang, 2009).
The main motto of Sigma’s remuneration policy is to ensure that the right talent is
attract, retain and motivate to deliver the strategic priorities of the business. The executive
remuneration is decided by the business against the overall performance of the business in a
year (Our background, 2018). The company offers the performance share to the executives to
compensate the bonus and incentives. The annual report (2018) of company briefs the
performance of the company has not been changed from last year. Company was not able to
achieve the targets and because of it, the salary and remuneration of CEO of the business is
unchanged in 2018 as well.
The remuneration committed of the business monitor the remuneration strategy of the
business timely to ensure that the effectiveness of the remuneration could be maintained and
it motivate the team. The remuneration strategy of the business includes below four principles
on the basis of which the remuneration of an executive is decided.

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Figure 1: Remuneration principle
(Annual report, 2018)
The executives of the business are offered the remuneration on the basis of the bellow
equation to ensure that the best compensation is offered to them against their services in the
business.
Figure 2: Remuneration Equation
The remuneration of CEO and CFO has been compared with the other executives of the
business and it has been found that the STI of CEOs is higher and the fixed remuneration and
LTI is quite lower. The financial performance and non financial performance of the business

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is measured by the remuneration committee and it decides that which executive has
contributed to achieve the goal of the business.
Comparison with Sonic healthcare:
The remuneration policies of Sigma healthcare has been further compared to the
Sonic healthcare. The remuneration company report brief that the remuneration level of the
company has been improved in current year because of improvement in the performance of
the business (Etnier and Chang, 2009). The sonic healthcare’s remuneration committee is also
offering the incentives through equity shares of the business.
The remuneration of CEO and CFO of Sigma healthcare and Sonic healthcare has
been measured and the below results has been found:
Figure 3: Remuneration comparison chart
(Annual report, 2018)
The remuneration comparison of both the company lead to the conclusion that the
remuneration of CEO, M Hooper is higher due to the fact that the STI of the CEO is higher.
However, no changes have taken place in the total remuneration of CEO from last year. The
CEO has maintained a great ownership in the business. As well as, if the Sonic healthcare
CEO is taken into concern than the benefits from the stocks are higher than the salary. It leads

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to the conclusion that both the companies are offering the shares in terms of benefits and
incentives to CEO.
Through comparing the remuneration of both the business, it has been found that the
ultimate goals of both the companies are to make sure that the right talent is attract, retain and
motivate to deliver the strategic priorities of the business. Due to it, both the companies are
offering great values to their executives, chief financial officer and chief executive officers to
meet the goals.

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References:
Annual report. 2018. Sigma Healthcare. [online]. Available at:
http://investorcentre.sigmahealthcare.com.au/static-files/5762822b-5c82-4e61-a7d6-
50c0963fcf1d (accessed 4/9/18).
Annual report. 2018. Sonic Healthcare. [online]. Available at:
http://investors.sonichealthcare.com/FormBuilder/_Resource/_module/
T8Ln_c4ibUqyFnnNe9zNRA/docs/Reports/AR/sonic-healthcare-limited-2017-annual-report-
online.pdf (accessed 4/9/18).
Etnier, J.L. and Chang, Y.K., 2009. The effect of physical activity on executive function: a
brief commentary on definitions, measurement issues, and the current state of the
literature. Journal of Sport and Exercise Psychology, 31(4), pp.469-483.
Our Background. 2018. Sigma Healthcare. [online]. Available at:
https://sigmahealthcare.com.au/our-background/vision-mission-values/ (accessed 4/9/18).
Richard, P.J., Devinney, T.M., Yip, G.S. and Johnson, G., 2009. Measuring organizational
performance: Towards methodological best practice. Journal of management, 35(3), pp.718-
804.

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Appendix:
Sonic Healthcare Sonic Healthcare
CEO, M
Hooper
CFO,
Ms I
MacPhe
rson
CEO,
Dr
Colin
Goldsch
midt
CFO,
C.D.
Wilks
Short
Term
Benefits
Salary and base fees $
1,250,477
$
475,170
237801
8
Committee fees
Cash short term incentive $
93,978
269462
0
Non monetary benefits $
3,407
$
3,407
Post
employ
ment
benefits
Superannuation benefits $
19,868
$
19,868
19616
Other long term benefits $
56,460
$
25,458
Termination payments
Value
in
share-
based
plans
Total remuneration excl. Value in
share based plan
$
1,424,190
$
631,780
509225
4
Performance rights
60,822 27,021
Loan funded shares
1,072,072 324,751 464,659 206,430
Total remuneration incl. Value in
share based plan 2,496,262 956,531
Share based payment as
proportion of remuneration
43% 34% 45% 83%