Reserve Bank of Australia Annual Report – 2016 Financial Statements Note 12 – Key Management Personnel

The key management personnel of the Reserve Bank 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 Bank. On the retirement of the Assistant Governor (Banking & Payments) late in 2015, the responsibilities of this position were consolidated with those of another Assistant Governor, creating a single role as the Assistant Governor (Business Services); there are now five Assistant Governors compared with six in the previous year. During the financial year, a total of 22 individuals occupied positions classified as Key Management Personnel for all or part of the year, the same as in the previous year.

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 these parameters, the Reserve Bank Board Remuneration Committee, comprising three non-executive directors, makes a recommendation on remuneration for these positions for the approval of the Board, which is the ‘employing body’ for the positions. Fees for non-executive members of the Reserve Bank Board and the Payments System Board are determined by the Remuneration Tribunal. The Governor, in consultation with the Board Remuneration Committee, determines the remuneration of Assistant Governors and other staff. 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.

In December 2015, the Remuneration Tribunal determined that, effective 1 January 2016, an adjustment of 2 per cent would be made to the remuneration of offices in its jurisdiction, including those of the Governor and Deputy Governor. Accordingly, total remuneration for the position of Governor was $1,030,645 (including superannuation salary of $878,549) and for the Deputy Governor was $771,120 (including superannuation salary of $593,782).

The RBA discloses remuneration of key management personnel in terms of both AAS and the FRR; these disclosures are set out below.

Disclosures under AAS

Under AAS, disclosure of remuneration of key management personnel is based on AASB 124 – Related Party Disclosures, as shown below in Table A. 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 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 staff, health benefits. Other long-term 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 during 2015/16 and 2014/15 by the RBA to any key management personnel.

There were no related party transactions with Board members or executives. Transactions with director-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 Bank's procurement policy.

Disclosure under FRR

The disclosures on senior management remuneration required under section 27 of the FRR are shown in Table B below. Aggregates in Table B are similar to those in Table A and correspond to the same group of key management personnel. The figures in Table B exclude valuation changes in accumulated annual and long service leave entitlements, consistent with the requirements of the FRR.