The use of performance-based remuneration: High versus low-growth firms

This study analyses the CEO remuneration structure and level for 100 Australian-listed entities. Consistent with expectations, it finds that high-growth firms pay their CEOs a greater proportion of performance-based pay, when equity-based rewards only are considered. High-growth firms also place greater reliance on market and/or non-financial performance standards for the award of performance-based pay. The extent to which performance-based remuneration is used as a component of CEO pay is positively associated with firm size and growth options. Other potential determinants of performance-based pay, such as financial performance, are not significantly associated with the use of performance-based remuneration

Derivatives use and financial instrument disclosure in the extractives industry

This article documents the use and disclosure of derivatives in the Australian extractives industry. We find that derivatives are used by 23 per cent of our sample, with mitigation of commodity risk and foreign exchange risk being the most common purposes for which derivatives are used. The most common types of derivatives used in the sector for hedging purposes are forward rate agreements and options. Results indicate that derivative use is positively associated with financial risk and firm size. We also examine the relation between firm characteristics and the extent of financial instrument disclosure, using a disclosure index based on the additional requirements in IFRS 7 Financial Instruments: Disclosures. Empirical results reveal that large firms with higher leverage, which use derivatives, and are audited by a Big 4 auditor provide more extensive disclosure of financial instruments

Do not-for-profits need their own conceptual framework?

This paper raises the issue of whether not-for-profit (NFP) organisations require a conceptual framework that acknowledges their mission imperative and enables them to discharge their broader accountability. Relying on publicly available documentation and literature, it suggests that current conceptaul Frameworks for the for-profit and public sectors are inadequate in meeting the accountability needs of broader NFP-specific accountability and the formulation of NFP-appropriate reporting practice, including the provision of financial and non-financial reporting. The paper thus theoretically challenges existing financial reporting arrangements and investes debate on their future direction