Based on the July 2026 Guerdon News, this episode explores long-term incentive valuation, highlighting how omitting dividend entitlements lowers present value. It covers the inverse relationship between dividend yields and growth metrics, OECD findings on proxy advisor conflicts, APRA enforcement actions, and updated governance frameworks.

Key Takeaways

· Failing to include dividend entitlements reduces the present value of a long-term incentive by 27% (four-year LTI, 6% dividend yield).

· Companies distributing higher capital via dividends are statistically less likely to incorporate growth measures in their executive performance hurdles.

· An OECD report indicates that proxy advisors often sell consulting services to the companies they grade, with only 6% of jurisdictions mandating disclosure for these secondary services.

· APRA is investigating Diversa Trustees over a $707,000 executive incentive payment that was made concurrently with a major operational failure, targeting compliance with CPS 511.

· Regulators are adjusting administrative procedures by halving FAR ongoing notification requirements and consolidating five minimum governance expectations into the new CPS 510 standard.

Original Guerdon Associates Articles

· LTI grants: Face Value or Fair Value – getting it right!

· High dividends, low growth? Inside the LTI strategies of the ASX 100

· Paid to Judge, Paid to Fix

· ASX to make it easier for employee equity plan changes?

· APRA’s investigation of Diversa Trustees’ remuneration is a stark warning for Remuneration Committee chairs.

· From box-ticking to board strategy: capitalising on APRA and ASIC’s governance regulation wind-back

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Disclaimer: This podcast is generated by third-party AI based on Guerdon Associates research and articles. The AI draws on Large Language Models (LLMs) for AI generated commentary utilising material prepared by Guerdon Associates. While Guerdon Associates humans curate the podcasts, the firm makes no warrant regarding the AI's interpretation, opinions, or accuracy. This audio does not constitute professional advice. To read our original, human-authored research and articles on which the podcast is based, or to learn about our remuneration advisory services, please visit guerdonassociates.com.

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