2021 Annual Report

Directors’ Report — Remuneration report 30 June 2021 SECTION 5. PLANNED REMUNERATION CHANGES FOR FY22 Throughout FY21, IGO has observed significant and increased pressure on the demand for general and executive talent. Observations of the local Western Australia labour market also indicate a trend for comparator and other companies planning to increase senior salaries to retain their talent in a competitive labour market and/or to attract the talent they require. Ensuring IGO remuneration attracts and retains key talent in the current market is a key challenge for IGO at all levels of the business. The Company reviews Executive KMP remuneration practices annually. In uncertain times, the Board and Executive team appreciate the importance of competitive remuneration to support our employees to deliver the sustained and enduring performance that drives value for our shareholders and community partnerships. In determining any changes to remuneration for Executive KMP in FY22, the Board considered a broader dataset of benchmarked information to reflect the Company’s changed status in FY21 into the ASX 100 group of companies. Benchmarked data on TFR, STI and LTI against a comparator group of 30 ASX companies was compared to IGO’s mining and resources industry comparator group to provide a more expansive examination of the remuneration paid to Executive KMP across a range of businesses. Across all Executive KMP roles, IGO TFR was observed to be at the low to mid-range of both the ASX comparator group and IGO peer group. For the ASX comparator group this may be understandable given a substantial portion of the Company’s market capitalisation growth has been attained recently and remuneration structures had not yet been adjusted for the change in business or role complexity. As such, increases in TFR in FY22 are justified based on a consideration of the current and future scope of the Executive KMP roles and the low to mid-starting point compared to IGO peers. The Board continues to adopt a balanced approach that supports the achievement of the strategic plan and the uncertain economic environment anticipated into FY22, however are mindful that the demand for talent will drive a level of retention risk that will require careful consideration for all Executive KMP and employee remuneration decisions. The Board will continue to monitor remuneration levels in the context of the broader market and appropriate remuneration levels will be put in place for any new appointments or changes of roles and responsibilities. Completed changes and/or progress towards remuneration objectives will be reported in more detail in the FY22 Remuneration Report, however a summary of the key elements of the proposed FY22 program are provided below: KMP TFR • The TFR for the Managing Director will increase by 15% from $870,000 to $1,000,000 to reflect the change in complexity of the role and in market movement in CEO fixed remuneration. • The TFR for the COO will increase from $630,000 to $700,000 and the TFR of the CFO will increase from $460,000 to $525,000. • Other increases in TFR for Executive KMP are in line with market benchmarking and are structured to ensure that Executive KMP fixed remuneration remains competitive with the comparator and broader industry groups for similar roles (page 63). KMP Short-Term Incentive Following an extensive benchmarking process in FY21, the Board believes that the current levels of short-term, at risk incentives are appropriately competitive for all Executive KMP. As a result, there will be no changes made to the quantum or weighting (as a percentage of TFR) of the STI program for Executive KMP in FY22. KMP Long-Term Incentive Following an extensive benchmarking process in FY21, the Board believes that the current levels of long-term, at risk incentives are appropriately competitive for all Executive KMP. As a result, there will be no changes made to the quantum, delivery mechanisms or weighting (as a percentage of TFR) of the LTI program for Executive KMP in FY22. LTI Measures The completion of the transaction with Tianqi has been transformative for the IGO business, fulfilling the transition of the Company to the clean energy metals sector and providing IGO with access to downstream battery metals opportunities. In recognition of the changing nature of the IGO business, the Board has approved the following changes to the performance measures and their weighting for the LTI program from FY22: • Relative TSR – 20% • Absolute TSR – 20% • Reserve Growth Per Share – 20% • EBITDA average margin – 20% • Climate Change Response Progress – 10% (new for FY22) • People and Culture – 10% (new for FY22) These changes reflect a set of measures that will more accurately track the progress made, and value delivered to shareholders, on a range of key strategic initiatives and long-term programs of work. 62 —IGO ANNUAL REPORT 2021