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DIRECTORS’ REPORT
80 Independence Group NL
Directors' report
30 June 2015
Remuneration report (continued)
(b) Remuneration policy and link to performance (continued)
Element
Purpose
Performance
metrics
Potential value
Changes for FY
2016
Total fixed remuneration
(TFR)
Provides competitive
market salary,
including
superannuation
Nil
Positioned at median
market rate
Reviewed in line with
market positioning
annually
STI
Reward for in-year
performance
Individual key
performance
indicators aligned to
the Group's overall
Strategic Plan
CEO: 40% of TFR
Executives: 15-25%
of TFR
Nil
LTI
Alignment to
long-term
shareholder value
3 year relative TSR
performance
CEO: 100% of TFR
Executives: 20-55%
of TFR
Nil
(c) Elements of remuneration
(i)
Total fixed remuneration
Executives receive their total fixed remuneration ("TFR") as cash and statutory superannuation. TFR is reviewed
annually, or on promotion. It is benchmarked against market data for comparable roles in companies in a similar
industry and with similar market capitalisation. The Committee aims to position executives at or near the median, with
flexibility to take into account capability, experience, value to the organisation and performance of the individual.
(ii)
Short-term incentives
The short term incentive ("STI") aims to align individual's performance with achieving the overall Strategic Plan of the
Group. Key performance indicators are set annually for executives and comprise a combination of the following metrics:
• Sustainability;
• People and performance;
• Processes and outputs;
• Company growth; and
• Quality and communications.
The Managing Director can currently earn 40% of his TFR as an STI, while all other executives can earn between
15-25% of their TFR as an STI.
The STI's are awarded in cash following assessment of actual performance against the performance metrics.
The payment of STI's is subject to Board approval. The Board has the discretion to adjust remuneration outcomes up or
down to prevent any inappropriate reward outcomes, including reducing (down to zero, if appropriate) any STI.
(iii)
Long-term incentives
The long term incentive ("LTI") component of the remuneration package is to reward executive directors, senior
managers and other invited employees of the Group in a manner which aligns a proportion of their remuneration
package with the creation of shareholder wealth over a longer period than the STI.
The Independence Group NL Employee Performance Rights Plan ("PRP") was approved by shareholders at the Annual
General Meeting in November 2011. Under the PRP, participants are granted share rights that will only vest if certain
performance conditions are met and the employees are still employed by the Group at the end of the vesting period.
Participation in the PRP is at the Board’s discretion and no individual has a contractual right to participate in the plan or
to receive any guaranteed benefits.
The Managing Director has the opportunity to earn 100% of his TFR as an LTI. All other executives have the opportunity
to earn between 20-55% of their TFR as an LTI.
Share rights granted after 1 July 2014
Vesting of the performance rights granted to executive directors and executives after 1 July 2014 is based on a total
shareholder return ("TSR") scorecard. The TSR scorecard for the three year measurement period will be determined
based on a percentile ranking of the Company's TSR results relative to the TSR of each of the companies in the peer
group over the same three year measurement period.
Independence Group NL
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