Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
Page 45
Page 46
Page 47
Page 48
Page 49
Page 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
Page 57
Page 58
Page 59
Page 60
Page 61
Page 62
Page 63
Page 64
Page 65
Page 66
Page 67
Page 68
Page 69
Page 70
Page 71
Page 72
Page 73
Page 74
Page 75
Page 76
Letter from Remuneration Committee On behalf of the Board I am pleased to present Southern Cross Media Group Limiteds the Groups 2015 Remuneration Report. The Remuneration Committee is tasked by the Board to establish appropriate policies and practices which represent the Boards philosophy on remuneration and are aligned with creation of shareholder value that of a balance between fair remuneration for skills and expertise with a risk and reward framework that supports long-term sustainability of our business. After conducting a full review of the Executive Remuneration practices in 2014 and embarking on a process of Board renewal over 2015 the Group is very pleased to report on the principal changes implemented over the course of the year Restructured executive team Effective 1 October 2014 the executive team was restructured to appoint a lead executive to be responsible for each of the Regional and Metro businesses. Rick Lenarcic was appointed to the role of Executive Director Regional Operations and Guy Dobson was appointed to the role of Executive Director Metro Operations. New appointments There were a number of new executive appointments and changes to KMP during the year. Grant Blackley commenced as CEO and Managing Director on 29 June 2015 replacing Rhys Holleran as CEO. Nick McKechnie was appointed Chief Financial Officer CFO on 8 September 2014 a role that had been vacant following the departure of Peter Lewis in July 2014. Vijay Solanki was appointed to the role of Director of Digital and Innovation on 11 May 2015 following the departure of Clive Dickens. Following the conclusion of the financial year Brian Gallagher was appointed to the newly created role of Chief Sales Officer on 15 July 2015. The Board is confident that the executive group is well placed to develop and implement the strategic agenda for the Group over the coming years. New Short Term-Incentive STI plan commenced 1 July 2014 The new plan better aligns all Executive Key Management Personnel KMP with the Groups short-term objectives and strategy by having a consistent framework for financial and non- financial metrics and re-weighting financial and non-financial metrics from 7030 to 8020. The Group-wide financial measure for Executive KMP has been changed to net profit after tax NPAT rather than earnings before interest tax depreciation and amortisation EBITDA to better align executive performance with bottom line return to shareholders. Long-Term Incentive LTI plan commenced 1 July 2014 The new plan comprises one consistent plan limited to KMP only with a three-year performance period with no vesting possible before the end of the performance period. The new plan introduces an additional performance measure with a TSR 50 and Earnings Per Share EPS 50 performance hurdle applying to awards. Salary increases There were no salary increases for Executive Key Management Personnel KMP during the year apart from Rick Lenarcic who was promoted to Executive Director Regional Operations and received a new remuneration package on promotion. With the commencement of a new CEO and a review of KMP remuneration a further increase was given to Rick Lenarcic for 2016 in recognition of his performance and to align his salary with other KMP and market rates. CEO compensation The new CEO was engaged with a similar remuneration package to the former CEO with a 5 increase in base remuneration to 1050000. The former CEO was paid out his contractual entitlements as set out on page 26. STI achievement For 2015 overall achievement of financial STIs for the Executive KMP was 7 and non-financial KPIs was 80. The Group did not achieve the financial STI gateway of 90 of budgeted NPAT therefore no Executive KMP were awarded any Group wide financial STI payments. We are pleased to report that the Regional operating segment achieved 100 of budgeted EBITDA and Rick Lenarcic was awarded 100 of his financial STI for this measure. Executive KMP received between 50 and 100 of their non- financial STIs depending on achievement of their KPIs. LTI achievement No LTI tranches vested during the year or at 1 July 2015. Further detail on the STI and LTI outcomes for 2015 are set out in section 5 of the Remuneration Report. Retention bonus The Board agreed that Nick McKechnie and Guy Dobson would be provided with a retention bonus opportunity upon the transition of the former CEO Rhys Holleran. The retention bonus for Nick McKechnie is 120000 subject to continuing employment to 30 June 2016 and Guy Dobson is 100000 subject to continuing employment and certain other performance targets. Further details on the potential retention bonuses can be found on page 30. The Board would like to thank Rhys Holleran for his significant contribution to the Group over 18 years and wishes him all the best for the future. He was instrumental in bringing the Group together in 2011 and has left a strong legacy to pass on to the new CEO Grant Blackley. The Group remains focused on delivering sustainable value for our shareholders. Ensuring we maintain an executive remuneration framework which aligns with this objective and supports our business strategy continues to be a key priority for the Board. The Board recognises it is our responsibility to maintain shareholder confidence in our leadership of the Group and our remuneration practices and to this end we value your feedback and look forward to welcoming you to our 2015 Annual General Meeting. Yours faithfully Yours faithfully Leon Pasternak Chairman of the Remuneration Committee REMUNERATION REPORT FOR YEAR ENDED 30 JUNE 2015 21 SOUTHERN CROSS AUSTEREO ANNUAL REPORT 2015