PRINCIPLE 8 REMUNERATE FAIRLY AND RESPONSIBLY

Remuneration Committee

The Remuneration Committee meets as required and on several occasions throughout the year.  For membership and attendance details of the Remuneration Committee, refer to the Directors’ Report.

The composition of the Remuneration Committee is based on the following principles: 

• The Remuneration Committee should consist of non-executive directors only
• The Remuneration Committee should consist of a majority of independent directors
• The Remuneration Committee should consist of a minimum of three members
• The Chairperson of the Remuneration Committee should be an independent director

The Remuneration Committee operates under a charter that details the Committee’s role and responsibilities, composition, structure and membership requirements.  The charter is reviewed annually to ensure it remains consistent with the Board’s objectives and responsibilities.  Refer to the Company’s website for a copy of the charter.

The main responsibilities of the Committee include: 

• Review of the Company’s remuneration and incentive policies
• Review of executive and senior management remuneration packages
• Review of the Company’s recruitment, retention and termination policies and procedures
• Review of the Company’s superannuation arrangements
• Reporting to the Board on the Committee’s role and responsibilities covering all the functions in its charter

In performing its responsibilities, the Remuneration Committee receives appropriate advice from independent external advisers.  During the year, the Remuneration Committee engaged the services of Guerdon Associates to provide market benchmarking data to assist with the 2011/12 executive remuneration review and to advise on proposed changes to the remuneration structure following feedback from shareholders.

The Executive Director prepares the draft minutes for each Remuneration Committee meeting which are tabled at the next Remuneration Committee meeting for review and approval.  The draft minutes are also included in the Board papers of the next Board meeting following the Remuneration Committee meeting.

Remuneration Policies

The Board’s objective in setting the Company’s remuneration policies is to provide maximum stakeholder benefit from the retention of a high quality Board and executive team.  This is achieved by remunerating directors and executives fairly and appropriately based on relevant market benchmarking data and the linking of the executives’ emoluments to the Company’s financial and operating performance in order to align with shareholder wealth creation.

The Nomination Committee is responsible for determining the remuneration for the non-executive directors, with the maximum aggregate amount approved by shareholders.  The non-executive directors receive their remuneration by way of directors’ fees only (including statutory superannuation) and are not able to participate in the executive incentive schemes.  There are no director retirement benefits other than statutory superannuation.

The Remuneration Committee is responsible for reviewing and determining the remuneration and incentive arrangements for the executives.  The Remuneration Committee obtains market benchmarking data from an independent external adviser to assist in determining market remuneration levels.  The remuneration and incentive arrangements have been structured to ensure that performance is fairly rewarded and to attract, motivate and retain a high quality executive team.

For details of the Company’s remuneration policies and disclosures, refer to the Remuneration Report.