Reserve Bank of Australia Annual Report – 2017 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. There were 20 of these positions in 2016/17, one fewer than in the previous year as the responsibilities of the Assistant Governor (Banking & Payments) were consolidated with those of another Assistant Governor, creating a single role as the Assistant Governor (Business Services) during 2015/16. A total of 25 individuals occupied these positions for all or part of the financial year, an increase from 22 in the previous year. This rise reflected 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 July 2017, the Remuneration Tribunal determined that, effective 1 July 2017, 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. Consistent with this, the Board resolved on 1 August 2017 to set the remuneration reference rate for the position of Governor at $1,020,000 (superannuable salary of $744,600) and that for the Deputy Governor at $765,000 (superannuable salary of $558,450). No performance payments were made to any individual while occupying these positions in 2016/17.

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, 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 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 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 during 2016/17 and 2015/16 by the RBA to any key management personnel.

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