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BRADKEN LIMITED ANNUAL REPORT 2013 17
Bradken Limited
Directors' report (continued)
30 June 2013
D. Remuneration report (continued)
(b)
Principles used to determine the nature and amount of remuneration (continued)
Non-executive directors
(i) Directors' fees
(ii) Non-Executive Director Share Acquisition Plan
Executive pay
(i) Base pay and benefits
Each year the Board sets the job goals for the Managing Director. The senior executives job goals are set and managed by the
Managing Director. The job goals are focused on the growth of the business and generally include measures relating to the
Group, the relevant business unit, and the individual, and include financial, people, customer, strategy and risk measures. The
measures are chosen to directly align the individual's reward to the goals of the Group and to its strategy and performance.
Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors.
Non-executive directors' fees and payments are reviewed annually by the Board. The Board also uses the advice of independent
remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market.
Non-executive directors may elect to have a percentage of their annual fixed directors’ fees provided in shares under the Non-
Executive Director Share Acquisition Plan (NED plan). Participation in the NED plan is voluntary.
AON Hewitt was engaged by, and reported directly to, the chair of the Human Resources Committee. The agreement for
the provision of remuneration consulting services was executed by the chair of the Human Resources Committee under
delegated authority on behalf of the board;
Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. External remuneration
consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay for
senior executives is reviewed annually to ensure the executive's pay is competitive with the market and reflects the individual's
performance. An executive's pay is also reviewed on promotion.
In addition to base pay, at risk short-term salary and benefits including superannuation , key management personnel are invited
to participate in a long term (3 year) incentive scheme. The combination of these comprise total remuneration.
No key management personnel has entered into any arrangement to limit the exposure or risk related to their remuneration.
In recognition of the prevailing external economic market conditions, the Chairman, the Non-Executive Directors and the Chief
Executive Officer have decided to voluntarily forego fee and salary increases in the period to June 30 2014.
Directors’ base fees are presently $130,000 (2012: $130,000) per annum. The Chairman's fee is currently $280,000 (2012:
$280,000) per annum. Non-executive directors do not receive performance related remuneration. Directors’ fees cover all main
board activities and membership of any Board committee.
The report containing the remuneration recommendations was provided by AON Hewitt directly to the chair of the Human
Resources Committee; and
AON Hewitt was permitted to speak to management throughout the engagement to understand Group processes, practices
and other business issues and obtain management perspectives. However, AON Hewitt was not permitted to provide any
member of management with a copy of their draft or final report that contained the remuneration recommendations.
As a consequence, the Board is satisfied that the recommendations were made free from undue influence from any members of
the key management personnel.
In addition to providing remuneration recommendations, AON Hewitt also provided advice on other aspects of the remuneration
of the Group’s employees.
The current base remuneration was last reviewed with effect from 1 October 2011. Total aggregate remuneration for all non-
executive directors, last voted upon by shareholders in October 2011, is not to exceed $1,200,000 per annum and actual
amounts payable to individual directors are determined after considering advice from external advisors and with reference to fees
paid to other non-executive directors of comparable companies.
Structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial
benefits at the executives' discretion it includes contributions to employee superannuation funds.
The following arrangements were made to ensure that the remuneration recommendations were free from undue influence:
Performance linked remuneration includes both short-term and long-term incentives and is designed to reward executive
directors and senior executives for meeting or exceeding their financial and personal objectives. The short-term incentive (STI)
is an “at risk” bonus provided in the form of cash, while the long-term incentive (LTI) is provided as rights over ordinary shares of
Bradken Limited under the rules of the Performance Rights Plan (PRP).
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Bradken Limited