Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
Please join this website to participate in discussions. Also join our email list at http://eepurl.com/cWsgfb
Image

21 Nov 2017 - Independent Review Panel Communique

A forum for discussing the IRP reports, both preliminary and final.
Accountability
Posts: 38
Joined: Wed May 03, 2017 2:44 pm

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by Accountability » Thu Nov 30, 2017 2:24 pm

Skip the rest, flick to page 56, and then chuck it in the trash completely dismayed.

Let's hire some friendly external Rem advisers and then proceed to ignore their advice when we don't like it...

......................................................

The former CEO’s contractual termination payment was adjusted in the following circumstances:

1 December 2014: The Board approved the amendment of the CEO’s termination provisions with
immediate effect to reflect a two-year notice period for either party.

 24 February 2015: A review of the former CEO’s employment contract by CPA Australia’s external
advisors was addressed to the Board. The review was intended to provide a high-level assessment of
the employment agreement, dealing with the extent to which the agreement provides terms and
conditions consistent with ordinary commercial expectations in Australia. The review stated that the
two-year termination payment was significantly above the anticipated range.

7 October 2016: The Board unanimously approved that CPA Australia’s and the former CEOs mutual notice period be increased from two to three years. This decision was made in an in-camera session of the Board (without the CEO present).

20 October 2016: The former CEO was informed in writing that the mutual notice period between CPA Australia and the former CEO has been increased from two to three years.

The Board decisions and papers do not provide any further background on the decision to extend the notice period. This reflects very poorly on the former Board, given the size of the termination payment being well above any comparable benchmark.

6.2.2.2 CPA Australia is unable to recover the former CEO’s termination payment
The Review Panel requested all relevant background material and documentation, including Board minutes and relevant external advice relating to the former CEO’s termination payment. Wherever possible, CPA Australia’s provided the requested documents. Where there were strict confidentiality provisions affecting relevant materials, documents were sighted by a member of the Review Panel (the Review Panel Members having signed Non-Disclosure Agreements). The Review Panel is satisfied, and agrees with CPA Australia that the former CEO’s termination payment was paid in accordance with CPA Australia’s obligations. On the basis of the information reviewed, CPA Australia has no ability to recover the former CEO’s termination payment.

6.2.2.3 Contractual arrangements prevent the Review Panel from disclosing the former CEO’s employment contract
The Review Panel was provided with copies of the annual letter of remuneration and incentive for each year of the former CEO’s employment. The Review Panel has viewed the terms of the former CEO’s employment and termination. The Review Panel cannot disclose any part of the former CEO’s employment contract due to confidentiality obligations binding CPA Australia and the former CEO. Any disclosure of the former CEO’s employment contract is a matter for the Board and the former CEO.

6.2.2.4 CPA Australia commissioned an independent remuneration review
Since the Preliminary Report’s publication, CPA Australia has engaged an external partner to conduct a remuneration review. The Review Panel has been informed by CPA Australia that the external partner will complete and present their report to CPA Australia’s Board in December 2017.

Steve Hamilton
Posts: 34
Joined: Mon Jun 19, 2017 11:49 am

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by Steve Hamilton » Thu Nov 30, 2017 3:25 pm

Yes interesting that you employ external consultants to review the CEO remuneration, then you ignore the report and increase his contractual termination payment entitlement...twice.

You just have to wonder on what planet these board members lived. At least we know the increased entitlement to three years was unanimous. So the supposedly independent directors appointed to the board had been captured by the cult of personality which was Mr Alex Malley.... the Naked CEO... no actually the Messiah of all things accounting and a future multi media megastar.

Surely the new board could take some action against these people (the old board). At the very least strip life memberships from these fools. Don't wait for the AGM show some backbone.... Sorry got carried away, they are on the gravy train now, don't want to upset anybody that counts, like previous board members or past presidents. This report will only upset the membership and we all know they aren't important.

certified sane
Posts: 24
Joined: Fri Mar 31, 2017 2:35 am

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by certified sane » Thu Nov 30, 2017 4:52 pm

7 October 2016: The Board unanimously approved that CPA Australia’s and the former CEOs mutual notice period be increased from two to three years. This decision was made in an in-camera session of the Board (without the CEO present).

20 October 2016: The former CEO was informed in writing that the mutual notice period between CPA Australia and the former CEO has been increased from two to three years
How on earth can one party of a contract like that decide to substantially change it and inform the other. Please correct me if I am wrong but that would require approval from both parties. Who requested the change? How was it offered? What rationale supported that decision?

How does 3 years pay add up to $4.9M? His base pay per year is $1,367,131 (from page 14 Information for CPA Australia Members May 2017) which would equate to a ludicrous amount of $4,101,393. Where does the extra $800,000 come from? Was a pay rise of $266,666 per annum during a period of intense member scrutiny made? Surely we are not paying bonuses on termination? How do we pay an additional 20% on an outrageous contract?

Excluding the aspect of CPA being contractually obliged to make the payment, who the hell is being held to account that a decision like that was made. Are we missing the point..... still.... obviously


If it looks like a duck, swims like a duck and quacks like a duck then it is probably a duck!

JWheldon
Posts: 287
Joined: Wed May 24, 2017 6:43 pm

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by JWheldon » Thu Nov 30, 2017 5:53 pm

Sounds like Graeme Wade, Richard Petty, Michelle Dolin, Tyrone Carlin, Jim Dickson etc has very serious questions to answer.

They state on the website that the board has a high standard to adhere to with regards to corporate governance. What standard??? They enabled Alex Malley to increase his payout and determine the remunerations of the management team. Sounds like one rule for the general membership and another rule for the board and management team.

Alex Malley will forever be remembered in the worst light. If Alex Malley was not guilty of all these problems, then he would be the first to disclose to the membership with regards to his employment contract, and firmly stand in the media to refute all these claims. Yet he is in hiding.

The current management team should all resign in disgrace. Adam Awrty, Jeff Hughes and other Alex Malley team need to resign and let a fresh team take over to re- direct the organisation into a new ethical direction.

Great to see that the audit was a great success over these many years. Time for a change in this area too.

Graeme Wade, Richard Petty and other past presidents since 2009 should have their life time membership removed immediately and made to compensate CPA Australia for their extremely bad management and lack of disclosure to the general membership.

What were the independent directors doing all these years, just turning up to the directors meeting for their directors fees and not really caring what was taking place in the organisation????



No wonder the general employees, were under stress to perform, disappointed with the management team and leaving the organisation.

Magnet
Posts: 56
Joined: Mon Jun 19, 2017 10:18 am

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by Magnet » Thu Nov 30, 2017 6:16 pm

Steve Hamilton wrote:
Thu Nov 30, 2017 3:25 pm
Yes interesting that you employ external consultants to review the CEO remuneration, then you ignore the report and increase his contractual termination payment entitlement...twice.
This part is just staggering!!! How can they get away with this!!??

User avatar
Stomper
Posts: 184
Joined: Tue May 02, 2017 9:55 am
Location: Sydney, NSW, Australia

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by Stomper » Fri Dec 01, 2017 10:02 am

Magnet wrote:
Thu Nov 30, 2017 6:16 pm
Steve Hamilton wrote:
Thu Nov 30, 2017 3:25 pm
Yes interesting that you employ external consultants to review the CEO remuneration, then you ignore the report and increase his contractual termination payment entitlement...twice.
This part is just staggering!!! How can they get away with this!!??
This surely is a breach of their duties as directors

Magnet
Posts: 56
Joined: Mon Jun 19, 2017 10:18 am

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by Magnet » Fri Dec 01, 2017 11:03 am

Stomper wrote:
Fri Dec 01, 2017 10:02 am
Magnet wrote:
Thu Nov 30, 2017 6:16 pm
Steve Hamilton wrote:
Thu Nov 30, 2017 3:25 pm
Yes interesting that you employ external consultants to review the CEO remuneration, then you ignore the report and increase his contractual termination payment entitlement...twice.
This part is just staggering!!! How can they get away with this!!??
This surely is a breach of their duties as directors
It certainly seems that a strong case could be made that the directors breached their duties with this decision.

They sought expert opinion from external consultants who told them that a 2 year notice period was over the top. So they then went wand made it a 3 year notice period in a private board meeting with no minutes of that meeting or explanation for that decision.

How was that decision acting in the the best interests of the company??
Last edited by Magnet on Fri Dec 01, 2017 11:37 am, edited 1 time in total.

User avatar
nakedadmin
Site Admin
Posts: 641
Joined: Thu Mar 23, 2017 4:38 pm
Location: Iceland

Re: 21 Nov 2017 - Independent Review Panel Communique

Post by nakedadmin » Fri Dec 01, 2017 11:35 am

certified sane wrote:
Thu Nov 30, 2017 4:52 pm
7 October 2016: The Board unanimously approved that CPA Australia’s and the former CEOs mutual notice period be increased from two to three years. This decision was made in an in-camera session of the Board (without the CEO present).

20 October 2016: The former CEO was informed in writing that the mutual notice period between CPA Australia and the former CEO has been increased from two to three years
How on earth can one party of a contract like that decide to substantially change it and inform the other. Please correct me if I am wrong but that would require approval from both parties. Who requested the change? How was it offered? What rationale supported that decision?
This is a good point. Normally when you negotiate with a person they are present. Also when the CEO was "notified" would the CEO have not had to agree to it. The IRP has documented this as if it was a unilateral decision by one party to the contract. May be the IRP doesn't actually know how contracts get agreed.

You'd have to guess the events were:

AFR starts showing some interest in CPAA, CPAA Advice has an incredibly low take up. Malley goes to the board (perhaps the newly appointed Chair, Tyrone, his old mate from Macquarie?) and simply makes the request verbally.

The board having already been told that 2 years was too much, approves an increase in the notice period, equivalent to $1.8m without any written request and without documenting the reason. The Company Secretary at the time is now acting CEO. At this time the board would have been expected to know that there was a significant risk this clause would be triggered.

Surely there is some legal obligation on the board to act in the interests of members.

certified sane wrote:
Thu Nov 30, 2017 4:52 pm
How does 3 years pay add up to $4.9M? His base pay per year is $1,367,131 (from page 14 Information for CPA Australia Members May 2017) which would equate to a ludicrous amount of $4,101,393. Where does the extra $800,000 come from?
Another great point.
The Naked Webmaster

Post Reply