Rio bonuses under scrutiny

Rio Tinto is under pressure from super funds and other big investors to change a loophole in its executive remuneration policy that threatens to deliver performance bonuses to management even in a bad year for the company, according to the Sydney Morning Herald.

New Rio director John Varley has begun a comprehensive review of the company's executive pay system and is believed to be giving particular attention to a long-term incentive known as the performance share plan, which one investor has dubbed the "heads they win, tails they win" clause.

The review comes amid increasing hostility to corporate excess, highlighted by last week's call from Rio chairman Jan du Plessis for an end to the era of spiralling executive salaries.

Du Plessis made headlines when he declared it was "absolutely clear" the remuneration trend of the past 20 years could not continue.

Slowing prices make China stimulus likely

China is likely to ease monetary policy and speed up government spending as it strives to meet annual economic growth targets and head off the threat of deflation, according to the Australian Financial Review.

Inflation data out yesterday showed prices in China rose 2.2% in June, the slowest pace in 29 months and a sign the nation’s breakneck growth is slowing.

The decision by the Chinese government this year to clamp down on property speculation, and faltering growth in Europe and the US, contributed to the slowdown.

“Chinese inflation is falling fast and is likely to remain tamed for the rest of the year,” said Qu Hongbin, co-head of Asian economic research at HSBC. “This leaves plenty of room for policy easing and Beijing’s top leaders confirmed their willingness to do so.”

Cost from ASIC reforms to hit to power sector

Reforms to the electricity sector proposed by the Australian Securities & Investments Commission will drive up costs, increase risk and stifle competition, suppliers have warned, according to The Australian.

In a development sure to stoke business community concerns that they face an onslaught of new regulatory imposts across a number of sectors, the four peak groups for energy suppliers, retailers and power stations have presented a rare united front and written to ASIC urging it to reconsider the plan.

Asciano predicts single port power

Asciano chief executive John Mullen believes the looming battle between its Patrick ports division DP World and newcomer Hutchison Ports will lead to the emergence of one dominant player on the country's wharves, according to the Sydney Morning Herald.

While rejecting suggestions the Patrick container-ports division was an underperformer, Mullen conceded that it was ''not a sacred cow in any way''.

"All parts of the business are perpetually under review … so if someone comes along and shows they can get an even bigger return out of the business by us hiving it off, demerging it, selling it or whatever, we will be all over it," Mullen said.

The ports and rail operator disappointed some investors last year when it ruled out a sale or demerger of the ports arm but Merrill Lynch analysts believe Asciano might still sell Patrick – which they value at $2 billion – if it can squeeze more out its workforce and economic conditions improve. The analysts cite possible buyers as Denmark's AP Moller-Maersk and unlisted infrastructure funds.