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Annual Report 2016 45
DIRECTORS’ REPORT
Directors' report
30 June 2016
(continued)
Remuneration report (continued)
Remuneration Committee (continued)
Use of remuneration consultants
From time to time, the Committee engages external remuneration consultants to ensure it is fully informed when making
remuneration decisions. During the year ended 30 June 2016 no remuneration recommendations, as defined by the
Corporations Act
, were provided by remuneration consultants. However, it did utilise data provided by AON Hewitt
McDonald ($5,030), Mercer Consulting ($4,500), Godfrey Remuneration Group ($4,000) and Ernst and Young ($5,100)
regarding salaries and benefits across the organisation.
Remuneration philosophy
The Board recognises that, as a mid-tier diversified mining company, there is an added complexity to the business that
depends upon the quality of its Directors and Executives. To ensure the Company continues to succeed and grow, it
must attract, motivate and retain highly skilled Directors and Executives.
The principles supporting the Company’s remuneration policy are that:
• remuneration arrangements are competitive and reasonable to attract and retain key talent;
• remuneration is linked to the Company’s strategic and business objectives and the creation of shareholder value;
and
• individual reward is based on performance against a range of appropriate targets relating to the delivery of and
execution of the Company’s strategic plan.
Remuneration components
Component Vehicle
Objective
Link to performance
Total fixed
remuneration
(TFR)
Base salary and
superannuation
contributions.
• To provide competitive fixed remuneration
with reference to role, market and
experience.
Annual performance of
individual and the Company.
STI
Cash payments targeted at a
percentage of TFR.
• To provide an ‘at risk’ incentive to reward
for current year performance which aims to
align individual’s performance with
achieving the overall strategic plan through
the achievement of annual performance
measures.
Combination of specific
Company KPIs and
Individual KPIs.
LTI
Performance rights based on
a percentage of TFR.
• To provide an ‘at risk’ grant to incentivise
and motivate executives to pursue the
long-term growth and success of the
Company which aligns to long-term
shareholder value and the Company’s
long-term strategic objectives.
Total Shareholder Return
percentile ranking over the 3
year performance period
relative to a selected peer
group.
• To support retention of executives and key
personnel.
Developments during FY16
Following extensive market research and the report prepared by Gerard Daniels in FY15 (as reported in the 2015
Annual Report) which examined the competitiveness of remuneration for Director's and executives employed by the
Company, on the recommendation of the Committee the Board approved:
• no increase to the Managing Director’s TFR for the second consecutive year;
• no general increase to executive TFR, except for instances of role change, for the second consecutive year;
• increase in potential STI award for the Managing Director from 40% to 50% of TFR;
• increase in potential STI award for executives from 15-25% to 30-40% of TFR; and
• no increase to Directors’ fees, however additional committee chairman fees were introduced (see page 55 for
details).
Independence Group NL
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