Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (103 of 2004)

Schedule 5   Remuneration of directors and executives

Corporations Act 2001

5   At the end of section 200F

Add:

(2) Subsection 200B(1) does not apply to a benefit given in connection with a person's retirement from an office in relation to a company if:

(a) the benefit is:

(i) a genuine payment by way of damages for breach of contract; or

(ii) given to the person under an agreement made between the company and the person before the person became the holder of the office as the consideration, or part of the consideration, for the person agreeing to hold the office; and

(b) the value of the benefit, when added to the value of all other payments (if any) already made or payable in connection with the person's retirement from board or managerial offices in the company and related bodies corporate, does not exceed the greater of:

(i) the amount worked out under subsection (3); and

(ii) the amount worked out under subsection (4).

(3) The amount worked out under this subsection is the amount worked out using the formula:

(Total remuneration * Relevant period) / 3

where:

relevant period is the number of years in the relevant period or 7, whichever is the lesser number.

total remuneration is the amount of the total remuneration of the person from the company and related bodies corporate during the last 3 years of the relevant period.

Note: Relevant period is defined in subsection (5).

(4) The amount worked out under this subsection is:

(a) if the relevant period for the person is less than 12 months - a reasonable estimate of the total remuneration that the person would have received from the company and related bodies corporate during the relevant period if the relevant period had been 12 months; or

(b) if the relevant period for the person is 12 months - the total remuneration that the person received from the company and related bodies corporate in the relevant period; or

(c) if the relevant period for the person is more than 12 months - the total remuneration that the person received from the company and related bodies corporate in the last 12 months of the relevant period.

(5) For the purposes of this section, if a person has held an office in relation to a company:

(a) throughout a period; or

(b) throughout a number of periods;

the relevant period for that person is that period or the period consisting of those periods.