IGO Interactive Annual Report 2018

DIRECTORS’ REPORT—REMUNERATION REPORT 30 JUNE 2018 IGO STIP OUTLINE 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 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. HOW PERFORMANCE WAS LINKED TO STIP OUTCOMES IN FY18 As part of the annual business planning process the Board determines the KPIs to reflect targets for the key strategic drivers of the business for the following year. The KPIs and performance achieved against them for FY18 are listed in the table below: Key Result Area FY18 KRA Measure Rationale for inclusion Opportunity % Achievement and commentary PRODUCTION AND FINANCIAL Achieve consolidated capex, operating, expenditure and production stretch targets for Nova, Jaguar and Long. Delivering strong production and financial performance is a key enabler to funding the achievement of the Company’s strategic plan. 48% 26.4% Cost targets partially achieved, Long production achieved and Nova & Jaguar production targets not achieved. RESERVES Deliver year-on-year improvement on a ‘like for like’ basis in Group Reserves (excluding Tropicana) by nominated amount net of depletion. Identifies the Company’s performance in achieving the organic growth of current assets. 8% 0% KPI not achieved as reserves decreased. GROWTH Complete nominated number of agreed strategic priorities. Outlines performance achieved to deliver a suite of strategic initiatives, brownfields/ greenfields opportunities and M&A projects important to growing shareholder value. 16% 16%* Successful completion of Stockman & Jaguar divestments and delivery of additional belt-scale exploration tenure. PEOPLE AND CULTURE Deliver year-on-year improvement in an agreed range of people, engagement and diversity metrics including turnover, gender balance, Aboriginal employment, employee availability and engagement. Focuses achievement on key strategic people enablers. 4% 1.6% Targets for the reduction in turnover and engagement score improvement missed targeted levels. Good progress made on employee availability. IGO ANNUAL REPORT 2018— 51