How to Maintain KMP Remuneration Records Throughout the Reporting Year

Maintaining KMP remuneration records is a year-round control process. The objective is not to draft the remuneration report early; it is to make sure every material remuneration event can later be traced to reliable source data, an approval, an effective date and a clear owner.

For Australian organisations, KMP records can feed financial reporting, listed-company remuneration disclosures, board and committee governance, payroll, equity administration and audit evidence. AASB 124 defines key management personnel and requires KMP compensation disclosures by category, while section 300A of the Corporations Act 2001 sets specific remuneration-report requirements for listed companies.https://standards.aasb.gov.au/aasb-124-dec-2022 https://www.legislation.gov.au/C2004A00818/latest/text

🎯 Scope of this guide: this article is about maintaining the underlying KMP remuneration evidence during the year. It is not a guide to deciding who is KMP, writing the annual remuneration report, benchmarking executive pay or running Remuneration Committee meetings.

The practical standard is simple:

At any point in the year, the organisation should be able to explain what changed in a KMP's remuneration, who approved it, when it took effect, what system recorded it and where the supporting evidence is stored.

1. Establish a single KMP remuneration control register

Start with one control register that links each KMP to the remuneration events and evidence relevant to them.

The register does not need to replace payroll, the HRIS, the equity platform or the general ledger. Its job is to connect those systems so the organisation can reconstruct the remuneration record without searching across inboxes and meeting folders.

For each KMP, maintain at least:

• name and role;
• KMP service start and end dates;
• current fixed remuneration or director fee basis;
• superannuation treatment;
• STI opportunity and plan year;
• LTI or equity awards outstanding;
• contract or service-agreement reference;
• latest remuneration decision date;
• relevant board or committee approval reference;
• source-system locations; and
• owner responsible for keeping the record current.

The register should point to evidence rather than duplicate every source document.

If the question is who should be treated as KMP, keep that decision in a separate KMP-identification process. This recordkeeping guide starts after the organisation has identified the relevant person and service period.

2. Use an event-driven update rule

The strongest control is simple: update the record when a remuneration event happens.

Do not rely on a year-end clean-up.

Events that should trigger an update include:

• appointment as KMP;
• cessation as KMP;
• change in role or responsibilities;
• salary or fixed-remuneration adjustment;
• board or committee fee change;
• STI target or opportunity change;
• STI outcome or discretionary adjustment;
• LTI or equity grant;
• vesting, lapse, forfeiture or exercise event;
• sign-on or retention award;
• contract amendment;
• termination or separation arrangement; and
• material non-monetary benefit or unusual payment.

For every event, capture four things together:

1. Decision — what was decided?
2. Authority — who approved it?
3. Effective date — when did it apply?
4. Evidence — where is the signed, approved or system-generated source?

This creates a reliable chain from governance decision to payroll, equity, accounting and eventual disclosure.

3. Separate the evidence layers

A common recordkeeping problem is treating one spreadsheet as if it were the evidence for everything.

A better approach is to maintain distinct evidence layers.

Governance evidence

Examples:

• board minutes;
• Remuneration Committee minutes;
• written resolutions;
• approved remuneration papers;
• signed employment or service agreements; and
• approved variation letters.

Operational evidence

Examples:

• payroll extracts;
• HRIS records;
• director fee schedules;
• plan-administrator reports;
• grant notices;
• vesting statements; and
• benefit records.

Accounting evidence

Examples:

• general-ledger reconciliations;
• accrual calculations;
• share-based payment calculations;
• fair-value schedules supplied by Finance; and
• year-end adjustment journals.

Reporting evidence

Examples:

• KMP disclosure workbooks;
• reconciliation schedules;
• annual-report drafting support;
• audit requests and responses; and
• final disclosure sign-offs.

The control register should show how these layers connect without forcing one team to own every underlying document.

4. Track remuneration components using consistent fields

AASB 124 requires KMP compensation to be disclosed in total and by categories including short-term employee benefits, post-employment benefits, other long-term benefits, termination benefits and share-based payment.https://standards.aasb.gov.au/aasb-124-dec-2022

That does not mean the operational register must copy the accounting disclosure table. It does mean the record design should make later classification and reconciliation possible.

Useful fields include:

Consistency matters more than complexity. If the same field means something different for different executives, reconciliation becomes harder.

5. Reconcile monthly rather than rebuilding annually

Monthly reconciliation should focus on exceptions and changes, not recreating the full remuneration report.

For current KMP, check whether:

• salary and fees match the approved rate;
• superannuation treatment is consistent with the approved arrangement;
• new allowances or benefits have appeared;
• unusual or manual payments need explanation;
• STI or deferred-remuneration payments occurred;
• equity events have been reflected in the relevant records; and
• any payroll treatment differs from the governance approval.

Record exceptions immediately with an owner and resolution date.

A short monthly control can prevent a large year-end investigation.

6. Run a quarterly completeness review

Quarterly review should answer a different question: have we captured every material change and the evidence behind it?

A practical quarterly checklist is:

• Has the KMP population changed?
• Have any KMP changed roles?
• Have any remuneration decisions taken effect?
• Were new STI or LTI arrangements approved?
• Were any awards granted, vested, lapsed or forfeited?
• Were any contracts amended?
• Did any KMP cease employment or board service?
• Are all approvals linked to their implementation records?
• Are open exceptions from the prior quarter resolved?
• Can Finance, Reward and Company Secretariat reconcile their records?

The quarterly review should produce a short exception list, not another large report.

7. Maintain decision-to-implementation traceability

Approval tracking already deserves its own governance process. The KMP recordkeeping control should not duplicate every Remuneration Committee action item.

Instead, it should confirm that a material remuneration decision made its way into the systems that matter.

For example:

Board approves CEO fixed-remuneration increase

→ approval minute recorded

→ effective date captured

→ HRIS / payroll updated

→ remuneration register updated

→ Finance impact understood

→ year-end disclosure evidence available

The control is complete only when the approved decision and the implemented outcome agree.

This is especially valuable where one decision affects several teams.

8. Keep equity records reconciled across functions

Equity is often where recordkeeping fragments first.

Reward may hold the plan design, Company Secretariat may hold approval evidence, the plan administrator may hold award balances and Finance may hold the share-based payment calculations.

Maintain a movement record for each KMP award covering:

• award identifier;
• grant date;
• instrument type;
• quantity granted;
• performance and service period;
• vesting conditions;
• approval reference;
• vesting outcome;
• quantity vested;
• quantity lapsed or forfeited;
• exercise or settlement where relevant; and
• reconciliation date to administrator and Finance records.

The objective is not to recreate the accounting calculation. It is to make sure the governance, administration and accounting records refer to the same award and movement history.

9. Keep board fees distinct from executive remuneration

Maintain non-executive director fee records separately from executive remuneration.

The record should distinguish:

• base board fee;
• Chair fee;
• committee Chair fee;
• committee member fee;
• superannuation treatment;
• effective dates of changes; and
• approval references.

This supports clear governance and makes later reporting easier without mixing board-fee decisions into executive-pay files.

10. Treat departures as a controlled recordkeeping event

KMP departures create several records at once and should trigger an explicit close-out process.

Confirm and retain:

• KMP cessation date;
• employment or board-service cessation date if different;
• final salary or fee amounts;
• leave or other final-pay items;
• STI treatment;
• outstanding deferred remuneration;
• LTI treatment;
• forfeiture, vesting or discretion decisions;
• termination benefits where applicable;
• separation agreement or deed;
• approval evidence; and
• final payroll, equity and Finance reconciliation.

Do not close the KMP record simply because the person has left. The organisation may still need the evidence for financial reporting and annual-report preparation.

11. Control access, versions and retention

KMP remuneration records are sensitive. Good governance requires both completeness and controlled access.

Define:

• where the authoritative control register is stored;
• who can edit it;
• who can approve changes;
• how source documents are linked;
• how superseded versions are handled;
• how corrections are documented; and
• how retention obligations are applied.

Section 286 of the Corporations Act requires companies to keep financial records for seven years after the transactions covered by the records are completed.https://www.legislation.gov.au/C2004A00818/latest/text

That does not mean every remuneration document automatically has the same retention period. Contracts, board materials, employment records and other supporting documents may be subject to different legal, governance and records-management requirements. Apply the organisation's approved retention policy and legal advice.

12. Design the year-end handoff before year end

The final purpose of year-round recordkeeping is to avoid rebuilding the remuneration evidence pack when reporting starts.

A clean year-end handoff should provide:

• final KMP population and service periods;
• reconciliation status for each KMP;
• approved remuneration changes during the year;
• STI decisions and implementation evidence;
• LTI and equity movement records;
• director fee changes;
• termination or departure records;
• unresolved exceptions;
• links to accounting support; and
• links to the relevant governance approvals.

From there, the annual-report team can prepare the required disclosures using reconciled evidence rather than starting a fresh data-collection exercise.

A practical KMP recordkeeping calendar

Common failure modes

Watch for these recurring problems:

• KMP service dates are reconstructed after year end;
• a remuneration increase appears in payroll but the approval cannot be located;
• committee minutes approve one amount and payroll implements another;
• STI discretion is documented without the final implemented outcome;
• equity records differ between Reward, the administrator and Finance;
• director fee changes are mixed into executive-remuneration workings;
• departed KMP records are closed before final remuneration events are reconciled;
• one spreadsheet becomes the only evidence source; and
• annual-report preparation is the first time anyone tests whether the records agree.

The cure is not a larger spreadsheet. It is a disciplined control cycle with clear ownership and traceable evidence.

Final checklist

Before calling the KMP remuneration records reporting-ready, confirm:

• Every KMP has confirmed service dates.
• Every material remuneration change has an approval reference.
• Effective dates agree across governance records and operational systems.
• Payroll and director-fee exceptions are resolved.
• STI outcomes link to approved decisions and implementation records.
• LTI / equity records reconcile across governance, administration and Finance.
• Departed KMP have completed close-out records.
• Open judgement or reconciliation items are documented.
• Sensitive access and version controls are operating.
• The year-end disclosure team can locate the supporting evidence without rebuilding it.

ℹ️ This guide is practical information only and is not legal, accounting or audit advice. Requirements depend on the entity and circumstances. Confirm applicable requirements with the organisation's legal advisers, auditors and accounting team.

References

• AASB 124 Related Party Disclosures: Australian Accounting Standards Board
• Corporations Act 2001, including sections 286 and 300A: Federal Register of Legislation