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Independent directors received average fees of
$54,703, with those in the top quartile receiving
upwards of $68,127. Independent directors in the
top tenth percentile were paid at least $84,198.
The remuneration of independent directors is
generally closer to the amounts paid to public-
company directors and markedly higher than the
fees paid to employee and employer-appointed
directors for several reasons, McGuirk explains.
For instance, the average stakeholder-appointed
directors’ fee was $46,793 for funds with $4 billion
to $6 billion in assets, compared with an average
of $61,312 for independent directors of funds in
this size range. (Five of the eight funds surveyed
with $4 billion to $6 billion in assets have at least
one independent director.)
Reasons for the higher fees of independent
directors include that many serve as board
chairpersons and are often selected for their
particular skills to add needed expertise to a board
and are often drawn from the ranks of Australian
Securities Exchange (ASX) directors.
McGuirk expects that as super funds appoint
more independent directors, the remuneration
of stakeholder-appointed directors will rise at
an increased rate. He says some directors, both
stakeholder-appointed and independent, are
“uncomfortable” that others sitting on the
same boards and with the same fiduciary/trustee
responsibilities are paid more because they are
THE IMPACT OF DISCLOSURE REQUIREMENTS
Remuneration specialist Jon Finlay doesn’t expect the compulsory disclosure of how much superannuation
funds pay their trustee directors and key executives will lead to immediate changes to their pay levels.
Finlay, head of board and executive remuneration for Towers Watson in Australia, says it will take time
to fully comprehend what the figures mean and to make reasonable comparisons between what different
He emphasises that director remuneration can depend on factors such as a fund’s size, whether a trustee
director is an independent or representing employers or employees, and the complexity of different roles. A
fund’s pay levels for directors and key executives might change, for instance, following a merger of funds
to create a bigger fund.
There was also the issue of fees for independent directors who brought specific expertise to a board,
rather than representing employees or employers.
“Funds are competing with the listed and other commercial boards for independent director talent,”
Under Stronger Super amendments to the Superannuation Industry (Supervision) Act, APRA-regulated
superannuation funds (Registrable Superannuation Entities) must publish on their public websites the
remuneration of each trustee director and key executive officers for the previous two completed financial
years. (Details must include fees, allowances, superannuation, non-cash benefits such as a car, any bonuses
Although the amendments require disclosure of up-to-date remuneration details from July 1, 2014,
Finlay points out that ASIC has issued a regulatory guide with so-called “safe harbour” provisions. Under
the provisions, fund websites will be regarded as up-to-date in regard to remuneration disclosures provided
the information is posted on the website within four months from:
» the last day of a fund’s most recently completed financial year in the case of executives
» the last day of the most recent 12-month period ending June 30 in the case of trustee directors.
Towers Watson is closely monitoring the impact of the remuneration disclosure requirements and will
report to clients once the data is available and analysed.
Finlay is encouraging super fund clients to “go beyond” the disclosure required by law to voluntarily
disclose in a simple, meaningful way how much trustee directors and executives actually “took home” for a
year, and to provide some useful context for the remuneration levels.
“For example,” he adds, “stakeholders may feel better that trustee director fees are at the median if a fund
size is at the median of all funds, and be curious if trustee director fees are significantly above or below fees in
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