Minimum deferral period for variable remuneration
28 Minimum deferral period for variable remuneration
The minimum deferral period for the variable remuneration of an accountable person of an accountable entity or a significant related entity is the period:
starting on the day determined under subsection (2) or (3); and
ending on the day determined under subsection (4).
When the deferral period starts
The minimum deferral period for the variable remuneration of an accountable person starts (subject to subsection (3)) on the later of the following days:
the day after the day on which the decision was first made that the person’s total remuneration would be wholly or partly conditional on the achievement of objectives;
if the achievement of those objectives (as first decided) is to be measured by reference to a particular period—the day that period starts.
However, if:
the variable remuneration is remuneration of a kind determined under paragraph 26(3)(a), or prescribed by the Regulator rules for the purposes of paragraph 26(1)(b); and
the determination provides, or the Regulator rules provide, for when the minimum deferral period for the variable remuneration starts;
then the minimum deferral period starts on the day so provided.
When the minimum deferral period ends
The minimum deferral period for the variable remuneration of an accountable person ends on the earliest day worked out under an applicable item of the following table.
End of minimum deferral period | ||
|---|---|---|
Item | Column 1 If … | Column 2 the period ends on … |
1 | it is the last day of the period of 4 years after the start of the minimum deferral period | (a) that last day, unless paragraph (b) applies; or (b) if, on the day determined under paragraph (a), the accountable entity or significant related entity considers that the accountable person is likely to have failed to comply with one or more of their accountability obligations under section 21—the later day on which the entity determines whether or not the person has failed to comply. |
2 | the accountable person ceases to be an accountable person because of the person’s death, serious incapacity, serious disability or serious illness | (a) the day on which the person so ceases, unless paragraph (b) applies; or (b) if, on the day determined under paragraph (a), the accountable entity or significant related entity is not yet satisfied on reasonable grounds that the person has complied with the person’s accountability obligations under section 21: (i) the day on which the entity is so satisfied (whether the compliance occurred on or before the entity being so satisfied); or (ii) if the day mentioned in subparagraph (i) does not occur—the day determined under item 1. |
3 | a circumstance determined under subsection (5), or prescribed by the Regulator rules for the purposes of this item, exists or occurs in relation to the accountable person | (a) the day on which the circumstance occurs or begins to exist, unless paragraph (b) applies; or (b) if, on the day determined under paragraph (a), the accountable entity or significant related entity is not yet satisfied on reasonable grounds that the person has complied with the person’s accountability obligations under section 21: (i) the day on which the entity is so satisfied (whether the compliance occurred on or before the entity being so satisfied); or (ii) if the day mentioned in subparagraph (i) does not occur—the day determined under item 1. |
In relation to item 1, if the accountable entity or significant related entity determines that the person has failed to comply, the remuneration policy must require the amount of variable remuneration paid or transferred to the person to be reduced by an amount that is proportionate to the failure: see paragraph 25(1)(b).
The Regulator may, by written notice given to an accountable entity, determine circumstances for the purposes of item 3 of the table in subsection (4) in relation to either or both of the following:
the accountable entity;
one or more significant related entities of the accountable entity.
Notice not a legislative instrument
A notice under subsection (5) is not a legislative instrument.
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