Reserve Bank of Australia Annual Report – 2012 Financial Statements Note 12 – Key Management Personnel

The group of Key Management Personnel of the Reserve Bank comprises members of the Reserve Bank Board, members of the Payments System Board and Assistant Governors, who have responsibility for planning, directing and controlling the activities of the Bank. No new positions were added to the group of Key Management Personnel in 2011/12. A total of 23 directors and executives occupied these positions over the course of 2011/12 (the same as in 2010/11).

Fees of non-executive members of the Reserve Bank Board and the Payments System Board are determined by the Remuneration Tribunal. The positions of Governor and Deputy Governor were declared as Principal Executive Offices (PEOs) within the jurisdiction of the Remuneration Tribunal in July 2011 in terms of the Remuneration Tribunal Act 1973. The Reserve Bank Board was declared as the employing body of these Offices and, on a recommendation from the Board's Remuneration Committee (comprising three non-executive directors), the Board set total remuneration for the Governor and Deputy Governor as $986,778 (including salary of $842,285) and $700,000 (including salary of $593,782), respectively, consistent with total remuneration declared by the Remuneration Tribunal. No adjustment was made to the Governor's remuneration in 2011/12. Total remuneration of the position of Deputy Governor was determined by the Remuneration Tribunal on the appointment to this position.

The Governor, in consultation with the Board Remuneration Committee, determines the remuneration of Assistant Governors. For staff generally, remuneration is market competitive and designed to attract and retain appropriately skilled people. Remuneration levels for employees are externally benchmarked. Consistent with section 67 of the Reserve Bank Act, remuneration is not tied to Australian Public Service classification bands.

The RBA is required to disclose remuneration of directors, executives and management in terms both of AAS and the FMOs. There are significant differences between these two standards of disclosure as to the definition of remuneration, the basis of measurement and the coverage of staff.

Disclosures under AAS

Disclosure of remuneration of key management personnel is made under AAS on the basis of AASB 124 – Related Party Disclosures. Disclosures of remuneration in terms of AASB 124 are on an accruals basis and cost to the Bank, including all leave and all fringe benefit tax charges, in addition to compensation and benefits. The aggregate remuneration of the RBA's key management personnel in terms of AASB 124 is shown in Table A.

Under AASB 124, short-term benefits include cash salary and, where relevant for executives, lump-sum payments, annual leave, motor vehicle benefits, car parking, health benefits and the fringe benefits tax paid or payable on these benefits. Post-employment benefits include superannuation benefits and, in the case of staff, health benefits. Other long-term benefits include long service leave. The rise in other long-term benefits in 2011/12 mainly reflects the revaluation of the provision for long service leave arising from the appointment of the Deputy Governor and the promotion to fill the vacant Assistant Governor position caused by this appointment. Members of the RBA's staff may salary sacrifice in exchange for certain benefits.

As at 30 June 2012 and 30 June 2011 there were no loans by the RBA to key management personnel.

There were no related party transactions with Board members or executives. Transactions with director related entities which occurred in the normal course of the RBA's operations were conducted on terms no more favourable than similar transactions with other employees or customers; such transactions were incidental and for small amounts. As the Board of NPA comprised executives of the RBA in 2011/12 and 2010/11, no directors' fees were paid in these years.

Disclosure under FMOs

The Bank also discloses information on remuneration of directors, executives and management in terms of Division 23 of the FMOs. The required disclosures are shown in Tables B to E below. The aggregates in Table B are reported on an accruals basis for executives only. Figures for non-executive directors are shown in Table E.

The figures in Tables C and D below report average remuneration for staff in the remuneration bands shown; these figures are reported on a cash basis. The apparent reduction in significant components of average remuneration in some remuneration bands between 2011 and 2012 reflects a number of factors including turnover of staff at different remuneration levels and the fact that there were 26 pay days in 2011/12 compared with 27 the previous year. No adjustment was made to the remuneration of the Governor in 2011/12. Lump-sum performance-related payments were available for all senior positions in 2011/12, except for the positions of Governor and Deputy Governor. Any difference between the figures in Table C and remuneration determined by the Board for the positions of Governor and Deputy Governor is due to differences in measurement between the FMOs and the Remuneration Tribunal.

Table C: Executive Remuneration^(a)

30 June 2012

Remuneration band	Number of staff	Reportable salary(b)	Contributed superannuation(c)	Reportable allowances(d)	Lump-sum payment(e)	Total
Total remuneration:
$180,000 to $209,999	1	167,824	33,505	–	6,848	208,177
$450,000 to $479,999	1	386,940	83,375	–	–	470,315
$480,000 to $509,999	1	406,688	86,881	–	6,934	500,503
$510,000 to $539,999	1	441,670	89,206	–	7,165	538,041
$540,000 to $569,999	1	460,103	92,906	–	7,438	560,447
$570,000 to $599,999	2	470,241	101,186	–	13,911	585,338
$630,000 to $659,999	1	516,370	107,909	–	11,124(f)	635,403
$990,000 to $1,019,999	1	815,735	179,407	–	–	995,142
	9

30 June 2011

Remuneration band	Number of staff	Reportable salary(b)	Contributed superannuation(c)	Reportable allowances(d)	Lump-sum payment(e)	Total
Total remuneration:
$240,000 to $269,999	2	217,842	44,583	–	–	262,425
$510,000 to $539,999	1	431,754	97,727	–	–	529,481
$540,000 to $569,999	3	460,973	96,754	–	–	557,727
$570,000 to $599,999	1	475,340	100,303	–	–	575,643
$750,000 to $779,999	1	614,706	138,692	–	–	753,398
$1,020,000 to $1,049,999	1	839,765	183,653	–	–	1,023,418
	9
(a) Table C is based on remuneration for the group of executives, including the Governor, Deputy Governor and Assistant Governors, included for reporting purposes under AASB 124 who received remuneration of more than $150,000 during the reporting period, including from part-time arrangements. Each row is an average figure based on the number of individuals in each band. The components of this table are measured on a cash basis in accordance with the provisions of the FMOs. (b) ‘Reportable salary’ includes gross payments (less any lump-sum amounts paid), the taxable value of reportable fringe benefits and exempt foreign employment income. The taxable value of reportable fringe benefits is the equivalent of the benefit received by staff excluding the tax payable on such benefits; the cost of fringe benefits shown under AAS in Table A and for the aggregates shown in Table B includes tax payable. (c) The ‘contributed superannuation’ amount is the average actual superannuation contributions paid, including any salary sacrificed amounts. (d) Reportable allowances' are the average actual allowances paid as per the ‘total allowances’ line on individuals' payment summaries. (e) ‘Lump-sum payment’ represents average actual lump-sum amounts paid during the reporting period to staff in the remuneration band. (f) Lump-sum payment awarded in capacity as Assistant Governor.

Table D includes disclosures for RBA and NPA staff. The increase in the number of staff in 2012 in the remuneration band ‘$150,000 to $179,999’ reflects that normal salary increases resulted in a higher number of RBA staff being remunerated at a level above the reportable threshold; it does not reflect the creation of new management positions. The average salary increase for the group of the RBA staff shown in Table D was 3.5 per cent in 2011/12. Lump-sum performance-based payments and modest career increments were also paid to some individuals within this group in 2011/12. NPA staff are not employees of the RBA and are employed on terms and conditions determined by NPA. Lump-sum performance-based payments are available to NPA staff.

Table D: Remuneration of Other Staff above the Reportable Threshold^(a)

30 June 2012

Remuneration band	Number of staff	Reportable salary(b)	Contributed superannuation(c)	Reportable allowances(d)	Lump-sum payment(e)	Total
Total remuneration:
$150,000 to $179,999	141	129,642	28,903	324	3,407	162,276
$180,000 to $209,999	54	152,760	36,950	50	3,770	193,530
$210,000 to $239,999	30	173,176	41,539	7	5,071	219,793
$240,000 to $269,999	22	201,062	44,710	8	8,370	254,150
$270,000 to $299,999	11	227,688	51,700	68	7,695	287,151
$300,000 to $329,999	3	246,795	42,899	–	19,977	309,671
$330,000 to $359,999	9	271,163	62,674	–	8,992	342,829
$390,000 to $419,999	3	332,413	66,286	–	6,071	404,770
$420,000 to $449,999	3	348,839	69,713	–	6,384	424,936
$450,000 to $479,999	2	377,974	84,097	–	7,180	469,251
$480,000 to $509,999	1	393,567	86,211	–	7,248	487,026
$540,000 to $569,999	1	414,992	45,230	–	101,207	561,429
	280

30 June 2011

Remuneration band	Number of staff	Reportable salary(b)	Contributed superannuation(c)	Reportable allowances(d)	Lump-sum payment(e)	Total
Total remuneration:
$150,000 to $179,999	117	130,992	29,969	26	1,377	162,364
$180,000 to $209,999	59	155,408	37,161	4	1,637	194,210
$210,000 to $239,999	29	176,588	43,213	5	2,623	222,429
$240,000 to $269,999	16	203,183	43,848	2	2,088	249,121
$270,000 to $299,999	10	226,734	51,526	–	7,408	285,668
$300,000 to $329,999	5	250,882	50,188	–	7,449	308,519
$330,000 to $359,999	4	276,733	66,943	–	–	343,676
$360,000 to $389,999	2	319,964	63,208	–	–	383,172
$390,000 to $419,999	4	344,218	68,543	–	–	412,761
$420,000 to $449,999	1	368,308	74,396	–	–	442,704
$450,000 to $479,999	1	382,683	77,263	–	–	459,946
$480,000 to $509,999	2	385,400	59,512	10,383	34,585	489,880
	250
(a) Table D shows remuneration for staff of the RBA and NPA whose reportable remuneration was $150,000 or more in the year, and whose remuneration was not required to be disclosed in Table C. Each row shows an average figure based on the number of staff in each remuneration band. These figures are disclosed on a cash basis. (b) ‘Reportable salary’ includes gross payments (less any lump-sum amounts paid), the taxable value of reportable fringe benefits and exempt foreign employment income. The taxable value of reportable fringe benefits is the equivalent of the benefit received by staff excluding the tax payable on such benefits. (c) The ‘contributed superannuation’ amount is the average actual superannuation contributions paid, including any salary sacrificed amounts. (d) ‘Reportable allowances’ are the average actual allowances paid as per the ‘total allowances’ line on individuals' payments summaries. (e) ‘Lump-sum payment’ represents the average actual lump-sum amounts paid during the reporting period for staff in the remuneration band.

Table E: Remuneration of Non-Executive Directors^(a)

	Number of directors
	2012	2011
$0 to $29,999	4	4
$30,000 to $59,999	5	5
$60,000 to $89,999	5	5
Total	14	14
Total remuneration received	639,334	598,932
(a) This table includes total remuneration received (or due and receivable) by non-executive directors who are members of the Reserve Bank Board or the Payments System Board.