Executive Equity Plan
Australian Institute of Company Directors (AICD)
Australian Employee Ownership Association (AEOA)
Australian Shareholders’ Association (ASA)
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Table of Contents
Introduction and Background
Scope of Guidelines
Summary of Legal and Accounting Obligations
Performance Hurdles and Benchmarks
Length of Service Hurdles and Timing Related Events
Other Restrictions on Equity Incentive and Ownership Plans
Transparency and Accountability
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Executive remuneration, including equity incentive and ownership plans, is an important
aspect of corporate governance. All shareholders and directors have a major interest in
encouraging improved corporate performance and ensuring the equitable sharing of reward
between owners and management.
Companies use equity incentive and ownership plans to encourage superior performance by
their senior executives and to assist in retaining them. These Guidelines set out principles
that companies can use to develop plans and provide guidance on applying those principles.
Boards are encouraged to follow these Guidelines when designing such plans and when
seeking shareholder approval for them.
The second edition of these Guidelines was published in May 2000. The publication of this
third edition is necessary so as to incorporate and reflect obligations under the current law;
accounting standards; and generally accepted good practice regarding the composition and
disclosure of executive equity plans.
The Guidelines are endorsed by the three organisations listed below which collectively
represent; employees, company directors and individual shareholders.
These Guidelines should be read in conjunction with the ASX Corporate Governance
Council Principles of Good Corporate Governance and Best Practice Recommendations.1