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
EYs terms of engagement included specific measures designed to ensure the independence of the advice provided. EY was required to maintain independence from management and any advice regarding KMP remuneration was provided directly to the Committee. The Committee recognises that to effectively perform its role it was necessary for EY to interact with management to obtain relevant information and work on approved matters from time to time. To ensure EY remained independent members of management were precluded from requesting services which would be considered a remuneration recommendation as defined by the Corporations Amendment Improving Accountability on Director and Executive Remuneration Act 2011. No remuneration recommendation was provided by EY or any other external advisors during the 2015 financial year. In order to assess the performance of the Groups Long-Term Incentive plans the Committee has engaged Deloitte Touche Tohmatsu Deloitte to prepare a report at each vesting date to determine the Groups Total Shareholder Return TSR Ranking within the comparator group and Earnings Per Share EPS growth as defined in each of the Long-Term Incentive Plans. The 2014 Corporate Governance Statement provides further information on the role of the Committee. The 2015 Corporate Governance Statement will be issued with the 2015 Annual Report. 4. Executive remuneration policy and framework The objective of the Groups executive reward framework is to ensure remuneration is reasonable for skills and expertise and reward for performance is competitive and appropriate for the results. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders and is informed by market practice for delivery of reward. The Board aims for the executive reward framework to satisfy the following key criteria Market competitive and reasonable Acceptable to shareholders and aligned to shareholders interests Linked to Group performance Transparency regarding reward outcomes The framework provides a mix of fixed and variable remuneration consisting of a blend of short- and long-term incentives. More senior roles in the organisation have a greater weighting towards variable remuneration compared to more junior roles. The executive remuneration framework currently has the following components Fixed remuneration comprising base pay benefits and superannuation STI LTI a Remuneration mix To ensure that executive remuneration is aligned to Group performance a portion of the executives target remuneration is at risk. The approximate target remuneration mix for the 2015 financial year was Target remuneration mix CEO 57 27 16 0 10 20 30 40 50 60 70 80 90 100 Fixed remuneration STI LTI CFO 64 18 18 0 10 20 30 40 50 60 70 80 90 100 Fixed remuneration STI LTI Other KMP 69 15 16 0 10 20 30 40 50 60 70 80 90 100 Fixed remuneration STI LTI Subsequent to the review of executive remuneration conducted by the Committee during 2014 the Groups policy remuneration mix for executives is Fixed remuneration of target total remuneration STI of target total remuneration LTI of target total remuneration CEO 50-60 20-25 20-25 CFO 60-70 15-20 15-20 Other Executive KMP 60-70 15-20 15-20 In making this determination the Committee had regard to fixed remuneration and target total remuneration compared to two comparator groups selected based on company size considerations one comparator group comprised companies with a similar market capitalisation to the Group and the other comparator group comprised companies with both a similar market capitalisation and revenue to the Group. Based on the findings of the benchmarking exercise the Committee believes the Groups remuneration mix policy is broadly aligned with companies of similar size in the market albeit with a slightly heavier weighting toward fixed remuneration. Over time when new contractual agreements are entered into the Group will look to move to a remuneration mix that is more closely aligned with its peers. 23 SOUTHERN CROSS AUSTEREO ANNUAL REPORT 2015