The Financial Accountability Regime remuneration proposals should not be extended to cover parent companies, according to the Association of Superannuation Funds Australia (ASFA).
Appearing before the Senate Economics Committee, ASFA deputy chief executive Glen McCrea discussed the legislation proposed in the Financial Accountability Regime (FAR).
Under the FAR draft released last October, accountable entities including superannuation industries must defer at least 40% of the variable remuneration of their directors and most senior and influential executives for a minimum of four years, and reduce their variable remuneration for non-compliance with their accountability obligations.
Asked by Senate Economics Committee chair, Paul Scarr, whether he believed this could be expanded to include parent companies with superannuation funds in their group, McCrea disagreed and said he did not believe the Government wanted to hold chief executives accountable.
“Ultimately, accountability for the fund is on the trustee and the Government has introduced a lot of legislation to clarify that and ensure there is that accountability. But historically, there have been arrangements for large corporates where they would have a large super fund sitting there that provided services and the members of that larger corporation were making contributions to that fund,” McCrea said.
“The issue of whether the parent company CEOs and executives should be accountable… you would want to be consistent across the economy and then we would be looking at supermarkets, at aviation, telecommunications and I don’t think the Government wants to have a regime where it is controlling the remuneration of people from big corporates.”
He concluded he felt there was unnecessary for legislation to be extended to include this matter and that the Government should be careful it did not unintentionally extend into it.