Remuneration Policy Guidelines
Renumeration
In determining competitive remuneration rates, the compensation committee seeks independent advice on local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes, benefit plans and share plans.
Independent advice should be obtained to confirm that executive remuneration is in line with market practice and is reasonable in the context of Australian executive reward practices.
Performance-based Remuneration
The compensation committee recognises that Legend Corporation Limited (the Company) operates in a global environment. To prosper in this environment, we must attract, motivate and retain key executive staff.
The principles supporting our remuneration policy are that:
- Reward reflects the competitive global market in which we operate
- Individual reward is based on performance across a range of indicators that apply to delivering results across the company
- Rewards to executives are linked to creating value for shareholders
- Executives are rewarded for both financial and non-financial performance
- Remuneration arrangements are equitable and facilitate the deployment of senior management across the company
- Senior managers receive a significant component of their reward in equity and are required to retain that holding over time
Short-term/long-term mix
The Company’s reward structure combines base salary, short-term cash incentives and share purchases with mechanisms to ensure significant ongoing share holding by senior managers. The cost and value of remuneration components are considered as a whole to ensure a balance between fixed and variable performance-related components in the short and long-term.
Accountabilities and Responsibilities
For administrative convenience, Legend has nominated the Company Secretary as the person responsible for communication with ASX. In addition, the Company Secretary has responsibility for overseeing and coordinating disclosure of information to ASX and communicating with the Chief Executive Officer and Chief Financial Officer in relation to continuous disclosure matters.
The Company allows employees to nominate a complying superannuation fund to have their superannuation contributions paid into and allows them to salary sacrifice additional amounts to the minimum 9% contribution amounts required to be paid by the Company which provides employees with increased flexibility and control over their contribution level and superannuation investment choice.
Market Comparisons
Consistent with attracting and retaining talented executives, the compensation committee endorses the use of incentive and bonus payments.
The committee continues to seek external advice to ensure reasonableness in remuneration scale and structure, and to compare the Company’s position with the external market. The impact and high cost of replacing senior employees and the competition for talented executives requires the committee to reward key employees when they deliver consistently high performance.
Board Remuneration
Shareholders approve the maximum aggregate remuneration for non-executive directors. The compensation committee determines actual payments to directors and reviews their remuneration annually, based on independent external advice with regard to market practice, relativities, and the duties and accountabilities of directors.
The maximum available aggregate remuneration approved for directors is $200,000.
A review of directors’ remuneration is conducted annually to benchmark overall remuneration including retirement benefits.
Senior Executive Remuneration
The Chief Executive Officer receives remuneration based on three elements comprising: -
- communicating with the Company Secretary in relation to possible continuous disclosure matters; and
- communicating with the Chief Executive Officer in relation to media matters and investor relations matters concerning the business unit.
Disclosure Principle
In order to ensure Legend meets its obligations of timely disclosure of such information, the company adheres to the following practices:
- Fixed annual rewards
- A short term incentive
- An executive share plan
Fixed Annual Rewards
The fixed annual reward comprises a base salary, from which he may salary-sacrifice income for superannuation and motor vehicle benefits.
Short Term Incentive
Short-term incentive applies to annual individual and company performance, evaluated against a set of performance criteria established at the start of each financial year.
Executive Share Plan
The executive share plan, structured as a long-term incentive, rewards executive performance that has also enhanced the value of shareholders’ investments in the company.
Summary
This remuneration structure ensures that annual company performance is clearly reflected in the chief executive officer’s reward outcomes.
Performance hurdles must be met to trigger any reward under both the short-term incentive and the executive share plan. Further, reward is made depending on the assessed level of individual and company performance.
The chief executive officer’s fixed annual reward should be reviewed annually in conjunction with the annual salary review process. The review should include independent external advice on market relativity for similar-sized roles. Adjustments to the chief executive officer’s fixed reward should be approved by the Board and disclosed.