Australian Report on Executive Remuneration


Assignment 2

This assignment is a compulsory assessment task.


Value: 15% of final mark

Due: 12.00pm (midday) on the scheduled teaching day of Week 9


Topic: Assessment 2 length (1200 words)


Marking criteria: See guide to Assessments

Write an essay of 1200 words on the following topic:

The issue of executive remuneration has been in the news since the financial crisis began in November 2007. Many people believe top executives of Australian firms receive too much money from the standpoint of broader community interests. As a result of this controversy, the Australian Productivity Commission has been asked to conduct an enquiry into executive remuneration. This is described on their webpage at

To undertake this assignment you will argue two positions:


Part A

Argue the case that there is no role for government policy in the setting of executive remuneration in corporate Australia.


Part B

Argue the case that there is a role for government policy in the setting of executive remuneration in corporate Australia. Explain what this role may be. Teaching Period 1, 2012 7


In writing your assignment, pay particular attention to the issues paper on this website and to some of the submissions that have been made to the Commission by members of the public.


Executive remuneration has been one of the most controversial issues in corporate governance.   In the wake of global economic crisis, executive payment was put on spotlight after reports found out that executives pursued strategies that rewarded them handsomely without considering the risk involved.   Various reports looking into the issue of global economic crisis found out that high executive perks were among the reasons leading to economic crisis.  Most companies reward executives with high pay and huge perks as a way of motivating them to perform more. Realizing that their payments and perks are pegged on organizational financial performance, executives have pursued strategies that rake in huge financial returns but with high risk.  As a result, most companies have found themselves in financial crisis and government use taxpayer’s money to bail them out.  While the government has remained a passive player on this issue, it is taxpayers who end up bailing out these companies. The report on Executive Remuneration in Australian looked into organizational practices in executive payment and the role of the government.  This paper will look into the issue of executive remuneration based on this report into two perspectives – one perspective when the government is an active player in regulating executive remuneration and the other when the government plays not role.