Reserve Bank of Australia Annual Report – 2011 Financial Statements Note 12 – Key Management Personnel

The key management personnel of the Reserve Bank are members of the Reserve Bank Board, members of the Payments System Board, and senior staff who have responsibility for planning, directing and controlling the activities of the Bank. This group comprised 23 in total in 2010/11, compared with 20 in 2009/10. The group includes the Governor and Deputy Governor, nine non-executive members of the Reserve Bank Board, five non-executive members of the Payments System Board and seven Assistant Governors. No new positions were added to the group of key management personnel in 2010/11. The increase of three in the number in this group reflected two members of the Board completing their terms and being replaced and turnover among the Bank's Assistant Governors. Consequently, four non-executive members of the RBA Board, and two Assistant Governors occupied their respective positions for only part of the year.

Fees of non-executive members of the Reserve Bank Board and the Payments System Board are determined by the Remuneration Tribunal. The terms and conditions on which the Governor and Deputy Governor held office in 2010/11 were determined by the Reserve Bank Board, in accordance with section 24A of the Reserve Bank Act 1959. As has become practice, the Board's Remuneration Committee (comprising three non-executive directors) reviewed these terms and conditions and, consistent with the Act, made a recommendation to the Board. The Governor and Deputy Governor did not participate in these deliberations. The 2010 review of remuneration for the Governor and Deputy Governor resulted in an increase in annual salary of 4 per cent; the increase in total remuneration was 3.2 per cent for the Governor and 2.5 per cent for the Deputy Governor.

The Governor, in consultation with the 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 1959, the level of remuneration is not tied with Australian Public Service classification bands.

The RBA discloses remuneration of key management personnel under AIFRS on the basis of AASB 124 – Related Party Disclosures. The disclosures are on an accruals basis and cost to the Bank, including, in addition to compensation and benefits, all leave and all fringe benefit tax charges. The aggregate remuneration of the RBA's key management personnel on this basis was:

Short-term benefits include cash salary and, where relevant for executives, 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. Members of the RBA's staff may salary sacrifice in exchange for certain benefits.

As at 30 June 2011 and 30 June 2010 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 2010/11 and 2009/10, no directors' fees were paid in these years.

The information contained in the following table shows details of the salary and total remuneration of directors and management. The figures on which the table is based comply with AASB 124, the usual commercial standard. Total remuneration is cash salary plus the other components of remuneration in accordance with disclosures under AASB 124, as defined in the table on the previous page.

Remuneration of Key Management Personnel

Average figures are shown for salary and total remuneration in remuneration bands in which there is more than one individual.