29 2022 ANNUAL REPORT DIRECTORS’ Report (cont.) Changes to the Remuneration Framework The Board regularly reviews our executive remuneration structure to ensure it continues to drive shareholder value and enables us to attract and retain the talent we need. As we embed our new flagship KOTH mine, the Board has decided to adopt changes to our remuneration arrangements to further strengthen the alignment of executives with key business imperatives and ensuring a focus on long-term sustainability of returns for shareholders. These changes are summarised below. Refer to Section 11.7 for details. FY22 - Discontinue the Project Incentive Opportunity (PIO) The PIO was implemented in FY22 as a one-off program at a critical stage of the business, specifically designed to align CEO and executives on delivering the flagship KOTH project and achieving production targets at the Darlot site. With KOTH now successfully commissioned, outcomes of the PIO metrics will be evaluated after 30 June 2023 being the end of the performance period. The performance achievements and any vesting outcomes will be provided in the 2024 Remuneration Report. FY23 – Rebalance the pay mix for the CEO and executives Recognising Red 5’s growth as a gold producer and alignment with market peers, the Board has rebalanced the pay mix to enhance the focus of executives over the longer term. This will see CEO and executives remuneration mix decrease in weighting for annual incentives (STI) and increase in weighting for long term incentives (LTI). FY23 – Simplify the deferred equity structure and rebalance performance measures for STI STI outcomes for the CEO and executives will continue to be delivered in 50% cash and 50% deferred equity, comprising Service Rights. To simplify and align with contemporary market practice, the deferred equity structure will be in the form of service-based rights only which may vest subject to 12 month continued employment. Previously it was in the form of both service-based and deferred rights. Short term metrics linked to the STI will also be rebalanced to equal weightings across all short term key performance indicators. FY23 - Remove the re-testing mechanism and production gateway from the LTI The re-testing mechanism for the relative Total Shareholder Return (TSR) vesting hurdle will be removed, based on misalignment with market practice and shareholder views. Whilst the positive TSR gateway will remain, the Board has determined the production gateway is no longer appropriate for the LTI. This change recognises production performance continues to be a key metric for the STI and the positive TSR gateway requirement on the LTI is sufficient to ensure appropriate outcomes for executives are also in the interests of shareholders. The Board is confident that Red 5’s current and planned remuneration policies continue to support the financial and strategic goals of the business as a leading gold producer. We are committed to transparency and an ongoing dialogue with shareholders on remuneration and to this end we have made changes to the 2022 Remuneration Report to improve the overall format and flow of information. On behalf of the Board, I invite you to review the full report and thank you for your continued support of Red 5. Sincerely Kevin Dundo Chairman TABLE OF CONTENTS This Remuneration Report (Report) outlines the remuneration arrangements in place for key management personnel (KMP) of Red 5 Limited (Red 5 or the Company) for the year ended 30 June 2022 (FY22) in accordance with the requirements of the Corporations Act 2001 and its Regulations. The Report contains the following main sections: 12.1 Who is covered by this Remuneration Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 12.2 Remuneration Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 12.3 Principles of Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 12.4 Executive Remuneration Framework and Components. . . . . . . . . . . . . . . . . . . . . . . . . . 31 12.5 FY22 Executive Remuneration Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 12.6 Non-Executive Directors’ Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 12.7 Planned Remuneration Approach for FY23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 12.8 Details of Remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 12.9 Additional Remuneration Disclosures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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