Directors’ Report
Remuneration Report (audited) (continued) Structure (continued) The table below illustrates the structure of the Company’s executive remuneration arrangements: Remuneration component Fixed Remuneration
Short Term Incentive component
Long Term Incentive component
Vehicle
Purpose
Link to performance
•
Represented by total employment cost (TEC)
•
Set with reference to role, market and experience
•
Comprises base salary, superannuation contributions and other benefits
•
Executives receive their fixed remuneration as cash and are not given the opportunity to receive their fixed remuneration on other fringe benefits form such as vehicles.
•
Paid in cash
•
•
Awards are made in the form of share purchase options, or share purchase rights
•
•
No link to performance
Rewards executives for their contribution to achievement of Company outcomes, as well as key performance indicators (KPI’s)
•
20 day moving average Company market capitalisation is a key metric.
•
Linked to other internal measure such as discovery success.
Rewards executives for their contribution to the creation of shareholder value over the longer term
•
Vesting of awards is dependent on continuity of employment with the Company.
Fixed Remuneration Executive contracts of employment do not include any guaranteed base pay increases. TEC is reviewed annually by the Board. The process consists of a review of Company and individual performance, relevant comparative remuneration internally and externally and, where appropriate, external information independent of the board. The fixed components of executives’ remuneration are detailed in Table 1 of this report.
Variable remuneration – short term incentive (STI) The Company operates an annual STI program this is available to all executives and awards a cash bonus subject to the attainment of clearly defined Company, business and individual measures. The total potential STI available to individual executives is set at a level so as to provide sufficient incentive to executives to achieve their targets and such that the cost to the Company is reasonable in the circumstances. Actual STI payments awarded to each executive depend on the extent to which specific targets set at the beginning of the calendar year are met. The targets consist of a number of key performance indicators (KPI’s) covering both financial and non-financial, corporate and individual measures of performance
Annual Report 2011
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