28 2022 ANNUAL REPORT 12. REMUNERATION REPORT LETTER FROM THE CHAIRMAN OF BOARD DIRECTORS’ Report (cont.) Remuneration Outcomes When determining the FY22 remuneration outcomes, the Board has carefully considered the achievements made over the year in combination with the unforeseen factors that have impacted the Company. The Board believes the outcomes (as outlined below) are reasonable as they provide appropriate alignment between executive performance, shareholder returns and recognition of executive retention criticality over the next business phase. Refer to Section 12.5 for further details. \ \ Total Fixed Remuneration (TFR): the TFR for Managing Director and Chief Financial Officer (CFO) increased by 7% (from $643,200 to $687,500) and 6% (from $415,388 to $440,000) over the year. The TFR adjustments were considered necessary to ensure market competitiveness based on external remuneration benchmarking analysis. \ \ Short Term Incentive Plan (STI): while the production gateway was not met, the Board exercised its discretion to award 50% STI outcomes to executives which were settled in Service Rights subject to continued employment. This decision recognises the magnitude of external unforeseen factors outside of management’s control which have influenced the production gateway and other STI metrics such as all in sustaining costs. Refer to Section 11.5.2 for further details. \ \ Long Term Incentive Plan (LTI): Red 5’s total shareholder return over the past three years (19.92%) represents significant outperformance against the S&P/ASX All Ordinaries Gold Index (-10.98%). Ore reserves over the same period have grown by well over 200%. Achieving stretch levels in these two metrics has resulted in 70% of FY20 LTI awards vesting in FY22. Refer to Section 11.5.3 for further details. \ \ NED Fees: there were no increases to the NED fees in FY22. Dear shareholders I am pleased to present Red 5’s Remuneration Report for the Financial Year to 30 June 2022 (FY22). FY22 Performance Summary The last 12 months has seen Red 5 navigate through the enduring impact from the COVID-19 pandemic, chronic labour skill shortages and global breakdown in the supply chain of key parts and spares. Despite these challenges, Red 5 has achieved significant milestones over the year including successful commencement on time and budget of the KOTH mine, and meeting the production guidance for the Darlot mine. These outcomes translated to significant share price out-performance (see Chart 1) and assured enduring organisation capability key to the sustainable growth of Red 5 and ongoing value to shareholders. Chart 1: Red 5’s share price performance vs. All Ordinaries Gold Index over the past 12 months RED 5 All Ordinaries Gold Index Jun 2021 Aug 2021 Oct 2021 Dec 2021 Feb 2022 Apr 2022 Jun 2022 0% -40% 40% 8% 120% 160% 32% -25%
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