Remuneration Committee Charter
Effective and appropriate remuneration policies are crucial to the ongoing success of the company. The Board may create a separate Remuneration Committee or may determine that the function is performed within the auspices of the full Board, the latter being the current position (in each case referred to as the “Remuneration Committee”). The Remuneration Committee plays a key part in ensuring that remuneration policies are effective, and reported and explained to shareholders.
Non-Executive Directors
- Non-executive directors will receive fees in the form of superannuation (statutory) and the balance in cash.
- Fees will generally be around the market average and/or based on advice from an independent advisor.
- Non-executive directors may participate in share option plans.
- Directors will be paid additional fees for work on committees.
- Non-executive directors will not receive retirement benefits.
Senior Executives
- Remuneration packages will generally be set to be competitive to both retain executives and attract experienced executives to the company.
- Packages will comprise fixed (cash) element and variable incentive components. The variable components will depend on company and personal performance.
- Short term incentives:
- Annual cash incentive as a proportion of fixed cash element;
- Criterion to be met will be:
- positive economic profit for year;
- growth in EPS on previous year;
- budget NPAT being achieved; plus
- personal KPIs being achieved.
- Senior executives may also participate in an option plan.
- The precise price should be not less than the market price at time of grant.
The amount of the incentive will depend upon the extent that the measure is exceeded.
The Remuneration Committee charter sets out the role, authority, responsibilities and operation of the Remuneration Committee.
Role of the Committee
The role of the Remuneration Committee is to assist the Board in the effective discharge of its responsibilities through providing guidance to the Board on matters relating to remuneration of Directors, Executives and staff. It’s role includes ensuring that the Company:
- has a remuneration strategy that is aligned with the overall business strategy;
- has remuneration policies and practices that are observed and that enable the Company to attract and retain Directors, Executives and staff who will create value for shareholders;
- fairly and responsibly rewards Directors, Executives and staff having regard to the performance of the Company, the external remuneration environment, and the performance of the specific area for which Directors, Executives or staff are responsible; and
- complies with the provisions of the ASX Listing Rules, Corporations Law of Australia, and the ASX Corporate Governance Council’s Principles of Good Corporate Governance.
Membership and Meetings
Membership
- Where a separate Remuneration Committee is established, it should comprise at least 2 non-executive Directors with a majority of the members assessed as independent by the Board. Directors will be assessed as independent if they satisfy the definition of independence contained in the ASX Corporate Governance Council’s Principles of Good Corporate Governance.
- The Chairperson of the Remuneration Committee should be assessed by the Board as an independent non-executive Director.
Meetings
- The Committee should meet at least twice per year.
- The Chief Executive Officer and other executives may be invited by the Remuneration Committee Chairperson to attend part or all of any meeting.
- The Remuneration Committee may ask certain parties to withdraw from any part of a meeting.
- No party shall be present whilst his or her performance or compensation is discussed, unless specifically invited by the Remuneration Committee.
Authority
The Remuneration Committee will have whatever access it requires to the Company’s personnel, information and documents.
The Remuneration Committee has the ability to direct any special investigations deemed necessary and to obtain independent professional advice to assist it with its functions, with the cost to be paid for by the Company.
Responsibilities
The Remuneration Committee's responsibilities include:
- reviewing the overall human resources remuneration strategy and monitoring its implementation;
- reviewing and recommending to the Board the Director and Executive remuneration policy and the design thereof, including its components and other terms and conditions;
- reviewing and recommending to the Board appropriate means to administer remuneration programs;
- developing performance management processes for evaluating the performance of Directors and Executives, and its relationship to remuneration;
- evaluating and advising the Board on the performance of Directors and Executives;
- reviewing and approving proposed termination payments for Directors and Executives;
- considering and recommending to the Board a policy for the overall structuring of the Company's retirement and superannuation plans;
- verifying the quantum of any bonuses or other incentives paid by the company;
- reviewing management’s recommendation on staff remuneration and performance linked compensation;
- reviewing any transaction between the Company and the Directors, or any interest associated with the Directors, to ensure the structure and the terms of the transaction comply with the law and are appropriately disclosed;
- reviewing and recommending to the Board all aspects of Director’s and Public Officer’s indemnity insurance; and
- providing the Company Secretary with all the relevant information for disclosure in the Annual Report.