32 2022 ANNUAL REPORT 12. REMUNERATION REPORT (AUDITED) (cont.) 12.4 EXECUTIVE REMUNERATION FRAMEWORK AND COMPONENTS (cont.) Fixed remuneration Fixed remuneration consists of base salary, superannuation and optional salary sacrifice benefits. It is designed to recognise the execution of business strategy and the qualifications, experience and accountability of executives. It is set with reference to comparable roles in similar companies. STI The following table outlines the FY22 STI arrangements in detail: What is the purpose? \ \ Reward executive KMP for the achievement of Red 5’s annual targets linked to business strategy and shareholder value; \ \ Ensure that executives have commonly shared objectives related to the delivery of annual business plans; \ \ Encourage share ownership among senior roles; and \ \ Provide a component of remuneration to enable the Company to compete effectively for the calibre of talent required for it to be successful, on a short to medium term basis. How is it paid? STI awards are paid in 50% cash and 50% equity following the conclusion of performance period. The 50% equity component is to be satisfied in 25% Service Rights (subject to 12 month continued service) and 25% Deferred Rights (which vest immediately into restricted shares which are subject to a 2 year disposal restriction). What is the target incentive opportunity? STI opportunity is set as a percentage of TFR. Subject to performance, the MD was entitled to an opportunity of up to 60% and other executive KMP were entitled to an opportunity of up to 50%. What is the performance period? The STI is offered annually and is measured over a single financial year. How is performance assessed? An executive’s actual award is based on meeting KPIs set in advance of the financial year. The KPIs comprise financial and non-financial objectives which directly align the individual’s reward to the Company’s annual business plans. The KPIs set for the FY22 awards were: \ \ Company Financial: budgeted EBITDA (30%) \ \ Gold production: across both Darlot and KOTH (20%) \ \ Safety: assessed by Total Recordable Injury Frequency Rate (TRIFR) and no fatalities (20%) \ \ Cost management: via All-in-Sustaining-Cost (AISC) per ounce (20%) \ \ Individual effectiveness: measured by Board or Managing Director (where applicable) (10%) KPIs are set at threshold, target, and stretch levels resulting in payout at 50%, 100% and 200% of target opportunity. What is the gateway? An overall gateway of 90% of budgeted gold production level must be achieved before any award is made under the STI. What vesting conditions / dealing restrictions apply to the equity components of the STI award? The Service and Deferred Rights granted following the performance period based on KPI outcomes and are intended to prevent the equity being sold for a period of 12 and 24 months respectively. \ \ Service Rights (50% of the equity component) vest into shares 12 months after the grant date based on continued employment with the Company (no further restriction period applies following the vesting); \ \ Deferred Rights (50% of the equity component) vest immediately into restricted shares which are subject to dealing restrictions for 24 months after the performance period. The purpose of deferral / restrictions is to manage the risk of short-termism inherent in setting short term objectives, promote sustainable value creation and build further alignment with shareholder interest. DIRECTORS’ Report (cont.)
RkJQdWJsaXNoZXIy MjE2NDg3