Reserve Bank of Australia Annual Report – 2018 Financial Statements Note 12 – Key Management Personnel

The key management personnel of the RBA are the Governor and Deputy Governor, non-executive members of the Reserve Bank Board, non-executive members of the Payments System Board and the Assistant Governors, who are the senior staff responsible for planning, directing and controlling the activities of the RBA. There were 20 of these positions in 2017/18. A total of 23 individuals occupied these positions for all or part of the financial year. This compares with 25 in the previous year, reflecting the conclusion of the terms of, and the appointment of successors for, a number of occupants of positions in the group of key management personnel.

The positions of Governor and Deputy Governor are designated as Principal Executive Offices in terms of the Remuneration Tribunal Act 1973, which provides for the Remuneration Tribunal to determine the applicable remuneration for these positions. Within the parameters determined by the Remuneration Tribunal, the Reserve Bank Board Remuneration Committee, comprising three non-executive members, makes a recommendation on remuneration for these positions for the approval of the Board, which is the ‘employing body’ for the positions. In accordance with provisions of the Reserve Bank Act, neither the Governor nor the Deputy Governor takes part in decisions of the Reserve Bank Board relating to the determination or application of any terms or conditions on which either of them holds office.

The remuneration reference rate for the position of Governor is $1,020,000 (superannuable salary of $744,600) and that for the Deputy Governor is $765,000 (superannuable salary of $558,450). Remuneration of each of the Governor and Deputy Governor in 2017/18 was at the applicable reference rate. No performance payments were made to either the Governor or Deputy Governor in 2017/18.

Fees for non-executive members of the Reserve Bank Board and the Payments System Board are determined by the Remuneration Tribunal. The Governor, after consulting with the Board, determines the rates of remuneration of Assistant Governors. For staff generally, remuneration aims to be market competitive and designed to attract and retain appropriately skilled people. Remuneration levels for employees are externally benchmarked.

The disclosure of key management personnel remuneration is based on AASB 124 – Related Party Disclosures, as shown below. The figures are disclosed on an accruals basis and show the full cost to the consolidated entity; they include all leave and fringe benefits tax charges.

Short-term employee benefits 4,857,890 5,331,771
Post-employment benefits 815,019 884,655
Other long-term employee benefits 277,765 596,005
Termination benefits
Total compensation(a) 5,950,674 6,812,431

(a) Within the group of key management personnel, 21 individuals (23 in 2016/17) were remunerated and included in this table; the two key management personnel that are not remunerated are the Secretary to the Treasury, as a member of the Reserve Bank Board, and the Chairman of APRA, as a member of the Payments System Board

Short-term benefits include cash salary and, where relevant for executives, lump-sum payments, motor vehicle benefits, car parking and health benefits and the fringe benefits tax paid or payable on these benefits.

Post-employment benefits include superannuation benefits and, in the case of executives, health benefits. Other long-term employee benefits include long service leave and annual leave as well as the cost of (or gain on) revaluing previously accrued leave entitlements in accordance with AASB 119 (refer Note 10).

There were no loans by the RBA to any key management personnel during 2017/18 and 2016/17.

There were no related party transactions with Board members or other key management personnel during 2017/18 and 2016/17. Transactions with Board member-related entities that occurred in the normal course of the RBA's operations were incidental and conducted on terms no more favourable than similar transactions with other employees or customers; any vendor relationships with such entities were at arm's length and complied with the RBA's procurement policy.