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18 BRADKEN LIMITED ANNUAL REPORT 2013
Directors’ Report
30 June 2013
Bradken Limited
Directors' report (continued)
30 June 2013
D. Remuneration report (continued)
(b)
Principles used to determine the nature and amount of remuneration (continued)
(ii) At risk short term salary
(iii) Long-term incentives - Performance Rights Plan
(c)
Key management personnel remuneration disclosure
Andrew Allen -
General Manager Corporate Development
Enda Sheridan - Executive
General Manager Mining Products
Brad Ward -
Executive General Manager Mineral Processing (appointed 1 July 2012)
Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party
Disclosures) of Bradken Limited and the Bradken Limited Group are set out in the following tables.
Steven Perry -
CFO and Company Secretary
The Group's long-term incentive, the Performance Rights Plan, focuses on rewarding for long term growth and the retention of
key people. Information on the Performance Rights Plan is set out on page 21.
The values in column (A) of each table below are remuneration as defined in Australian Accounting Standard AASB2
Share-
based payment
. This consists of share rights. These values are calculated based on a Black Scholes valuation of the rights in
the year in which they are granted and are amortised over the performance period to which they relate, which is typically a 3 year
period. The degree to which performance conditions will be met is unclear until the end of the relevant performance periods.
There is no certainty performance conditions will be met and there is therefore no direct correlation of these values to the
remuneration received by the executive in any period.
The values in column (B) of each table below shows the value of the rights that were granted to the executive for the
performance periods 1 July 2010 to 30 June 2013 (2013) and 1 July 2009 to 30 June 2012 (2012).
For the performance period 1 July 2010 to 30 June 2013 the performance conditions were not met and no rights are eligible to
vest for that period.
At the end of the financial year an assessment is made of the actual performance of the Group, the relevant business unit and
the individual targets set at the beginning of the financial year. A percentage of the at risk short term salary is awarded
depending on performance. At risk short term salary is not awarded where there is no year on year growth for the financial year.
The long-term incentive (LTI) is paid wholly on relative total shareholder return (TSR) performance over a 3 year period. The
initial rights are provided based on a set range of 30% to 50% of the executive's total cash base remuneration depending on the
position held by the executive. No rights vest to the executive if Bradken's TSR over a 3 year period is below 50% of the ASX
Small Ordinaries Index and no re-testing occurs.
The at risk short term salary is paid wholly on actual improvement in profitability. The value of the at risk short term salary
payable is set within a range of 30% to 60% of the executive's total cash base remuneration depending on the position held by
the executive. In calculating the at risk short term salary the growth in year on year NPAT is calculated and where applicable the
EBITDA of the executive's business. To achieve the full at risk short term salary value a growth of 15% on the previous year
profitability must be achieved.
Tom Armstrong -
Chief Operating Officer Engineered Products
Stephen Cantwell -
General Manager Rail
The key management personnel of Bradken Limited and the Group are the directors of Bradken Limited (see page 2), the Chief
Financial Officer and the General Managers and Chief Operating Officer of the Bradken business units who report directly to the
Managing Director. The executives are:
The Human Resources Committee recommends the at risk short term salary to be paid to the Managing Director for approval by
the Board. For other senior executives the Managing Director recommends the at risk short term salary to be paid, and seeks
approval from the Human Resources Committee.
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Bradken Limited