IGO Interactive Annual Report 2019

DIRECTORS’ REPORT—REMUNERATION REPORT 30 JUNE 2019 KMP AT RISK REMUNERATION IN FY19 The Company believes that at risk components are important elements of remuneration for all employees in the business to drive the achievement of key strategic initiatives and maintain alignment between employees and creation of sustainable shareholder value. The mix of fixed and at risk remuneration varies depending on the role and reward grading of Executives. It also depends on the performance of both the Company and the individual. The following is an overview of the total fixed and at risk remuneration for Executive KMP in FY19: Managing Director and CEO Chief Operating Officer and Chief Financial Officer Other executive KMP TFR – 36% STI – 25% LTI – 39% TFR – 42% LTI – 37% STI – 21% TFR – 53% LTI – 29% STI – 18% CLAWBACK PROVISION In FY17, IGO introduced a clawback provision for any unvested STI and LTI awards in the case of fraud, dishonesty, gross misconduct or a material misstatement of the financial statements and subject to Board discretion. IGO STIP OUTLINE FOR FY19 An outline of the key elements of the Short-Term Incentive Program (STIP) as it relates to the Company’s KMP is provided below: STIP OPPORTUNITY The STIP opportunity offered to each Executive as a percentage of TFR is defined by the individual’s role and reward grade. The STIP opportunity is market benchmarked and reviewed by the Board annually. STIP payments are awarded 50% cash and 50% equity (service rights) on or above threshold performance against a range of business objectives (Company KPI) and individual performance objectives (Individual KPI). PERFORMANCE TARGETS The payment of a short-term incentive to KMP is an at risk component of the individual’s total remuneration given that a set of performance targets must be met prior to payment. These targets are based on metrics that are measurable, transparent, and achievable, designed to motivate and incentivise the recipient to achieve high performance aligned with Company objectives and near-term shareholder value creation. PERFORMANCE ASSESSMENT The Company employs a system of continuous performance feedback to drive performance throughout the year, however a final performance assessment occurs annually following the completion of the financial year for each Executive. Executives are assessed on their contribution to the achievement of Company KPIs (80%), individual KPIs (20%) and their demonstrated support for the Company’s values. MEASUREMENT PERIOD The STIP program is an annual program and operates from 1 July to 30 June each year. STIP DEFERRAL COMPONENT The service rights component of the STI vest in two tranches, with the first tranche of 50% vesting on the 12 month anniversary of the STI award date, and the second tranche of 50% on the 24 month anniversary of the STI award date. Vesting of the service rights component of the STI granted to Executive KMP is based on a continuous service condition being met and is designed to act as a driver of retention and medium-term value creation. CESSATION OF EMPLOYMENT In the event that the Executive’s employment with IGO terminates prior to the vesting of all service rights, outstanding unvested rights will be reviewed by the Board and may or may not vest depending on the circumstances of the Executive’s cessation of employment. BOARD DISCRETION The payments of all STIs are subject to Board approval. The Board has the discretion to adjust remuneration outcomes higher or lower to prevent any inappropriate reward outcomes, including reducing (down to zero, if appropriate) any STI payment. IGO ANNUAL REPORT 2019 — 49