Note 5: People and Relationships
Introduction
This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.
5.1: Employee Provisions
2019 $’000 |
2018 $’000 |
|
Annual and long service leave |
2,546 |
2,172 |
Total employee provisions |
2,546 |
2,172 |
5.2: Key Management Personnel Remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly. The Group has determined the key management personnel to be the seven non-executive Board members, and the Executive team comprising the Chief Executive Officer, Chief Financial Officer, Chief Governance and Strategy Officer (until 30 November 2018), General Counsel, Chief Investment Officers, the Chief Investment Risk Officer (until 21 September 2018), the Chief Risk Officer (from 24 September 2018), the Chief Asset Management Officer (from 29 January 2019) and the Executive Director People and Culture.
2019 $ |
2018 $ |
|
Short-term employee benefits |
||
Non-executive Board member fees |
434,720 |
394,813 |
Executive base salaries |
3,165,851 |
3,038,488 |
Performance based compensation |
1,015,151 |
975,000 |
Annual leave (paid)/accrued, net |
(2,598) |
77,264 |
Total short-term employee benefits |
4,613,124 |
4,485,565 |
Post-employment benefits |
||
Superannuation contributions on behalf of Board members and executives |
205,696 |
187,428 |
Total post-employment benefits |
205,696 |
187,428 |
Other long-term employee benefits |
||
Performance based compensation |
338,384 |
325,000 |
Long service leave (paid)/accrued, net |
69,931 |
46,304 |
Total other long-term employee benefits |
408,315 |
371,304 |
Termination benefits |
||
Separation and redundancy payments |
232,634 |
– |
Total termination benefits |
232,634 |
– |
Total key management personnel remuneration expenses |
5,459,769 |
5,044,297 |
The total number of key management personnel that are included in the above table are:
2019 No. |
2018 No. |
|
---|---|---|
Summary of key management personnel |
||
Non-executive Directors |
7 |
13 |
Executives |
10 |
8 |
Total key management personnel |
17 |
21 |
During the 2018 financial year, there was a complete change in the composition of the Board members of the Corporation. There were never more than seven Board members at any one time; however, the 2018 financial year included partial service periods for each of the previous six and current seven Board Members.
5.3: Related Party Disclosures
A related party is a person or entity that is related to the entity that is preparing its financial statements. The Group has determined its related parties include:
The Responsible Ministers
The Hon Josh Frydenberg MP (to 28 August 2018)
The Hon Angus Taylor MP (from 28 August 2018)
The Hon Melissa Price MP (from 28 August 2018 to 29 May 2019)
Senator the Hon Mathias Cormann
Board Members
Mr Steven Skala AO
Ms Leeanne Bond
Mr Philip Coffey
Ms Laura Reed
Ms Andrea Slattery
Ms Samantha Tough
Ms Nicola Wakefield Evans
Key management personnel
Mr Ian Learmonth, CEO
Ms Leanne McDonald
Ms Rebecca Cottrell
Mr Kevin Holmes (until 30 November 2018)
Mr Michael Johnston (since 24 September 2018)
Ms Sara Leong (since 29 January 2019)
Mr Paul McCartney
Mr Stephen Panizza (until 21 September 2018)
Mr Andrew Powell
Mr Ludovic Theau
Other federal government agencies
Investments that are classified as Associates and Joint Ventures as disclosed in Note 3.1F: Equity Accounted Investments.
Transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 30 June 2019, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2018: $Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
The Group has not entered into any direct transactions with key management personnel other than in relation to remuneration for services provided, as disclosed in Note 5.2.
Transactions with Director-Related Entities
Mr Philip Coffey and Ms Nicola Wakefield Evans are independent non-executive directors of Lendlease Corporation Limited, where the CEFC has a $109 million equity investment at 30 June 2019 (2018: $52 million) in Lend Lease Real Estate Investments Limited managed Australian Prime Property Fund Commercial.
Mr Philip Coffey and Ms Nicola Wakefield Evans are also independent voting directors of Macquarie Group Limited. The CEFC has $100 million invested in fixed rate bonds with Macquarie Bank Limited as at 30 June 2019 (2018: $50 million), and through its wholly owned subsidiary, CEFC Investments Pty Ltd, has invested $75.5 million at 30 June 2019 (2018: $60 million) in Macquarie Agricultural Fund – Crop Australia managed by Macquarie Agricultural Funds Management Limited.
Ms Andrea Slattery is an independent non-executive director of AMP Limited. CEFC has a $121 million equity investment at 30 June 2019 (2018: $112 million) in the AMP Capital Wholesale Office Fund, for which the trustee is AMP Capital Investors Limited, a controlled entity of AMP Limited.
Ms Nicola Wakefield Evans’ husband was appointed as a director of Blue Sky Alternatives Access Fund Limited on 29 November 2018. The CEFC has previously provided a loan facility to Waymouth Street Property Trust (a related entity) which has a balance outstanding of $28 million at 30 June 2019 (2018: $31 million).
Ms Andrea Slattery’s son is in-house Counsel at Cleanaway Waste Management Limited. The CEFC has provided a loan facility to Cleanaway Waste Management Limited with an outstanding balance of $90 million at 30 June 2019 (2018: $90 million). In addition, the CEFC has previously provided a loan to Cleanaway ResourceCo RRF with a balance outstanding of $10 million at 30 June 2019 (2018: $10 million).
Ms Leeanne Bond is a director of Snowy Hydro Limited which has provided Power Purchase Agreements (PPAs) to a number of projects that the CEFC has either invested in through equity or debt or that the CEFC is currently in discussions with regarding potential future investment transactions.
The Directors named above took no part in the relevant decisions of the Board in regards to these related party transactions.
The CEFC is not aware of any trading transactions entered into with director-related parties during the financial year ended 30 June 2019 (2018: Nil).
Transactions with Other Related Entities
During the year the Corporation has loaned funds to a subsidiary, CEFC Investments Pty Ltd, on commercial terms. Balances arising from these transactions are disclosed in the Corporation’s stand-alone financial statements in Note 7 and have been eliminated in these Consolidated Financial Statements.
Under the CEFC Act, the Corporation has a number of transactions with the Commonwealth. The principal transactions are those related to the amounts drawn from or repaid into the CEFC Special Account that is administered by the Department for the Environment and Energy.
The following transactions were entered into with other related parties under common control during the financial year ended 30 June 2019:
Related party |
Purpose |
2019 $ |
2018 $ |
---|---|---|---|
Comcover |
General insurance premiums |
168,644 |
91,345 |
Comcare |
Workers compensation insurance premiums |
47,228 |
34,992 |
Department of Defence |
Vetting of executives |
3,675 |
869 |
Department of the Environment and Energy |
Certification fee for the Carbon Neutral Program |
5,000 |
– |
During the financial year ended 30 June 2018 a review of the operation of the CEFC Act under Section 81 was commissioned by the Department of the Environment and Energy. The CEFC agreed to reimburse the Department the first $100,000 towards the cost of the review, with amounts above $100,000 to be shared 50:50 between the CEFC and the Department. The total cost of the review was $250,000, with the CEFC contributing $175,000 of this cost. These costs were paid to the Department of the Environment and Energy during the year ended 30 June 2019 after being accrued as an expense at 30 June 2018.
During the financial years ended 30 June 2019 and 30 June 2018 the CEFC incurred costs for several market research studies and subscriptions that were entered into jointly with the Australian Renewable Energy Agency (‘ARENA’). The CEFC incurred the full cost relating to these purchases from the suppliers and recovered the appropriate share of these costs directly from ARENA.
Visit
https://www.transparency.gov.au/annual-reports/clean-energy-finance-corporation/reporting-year/2018-2019-56