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APN
annual report
2011
remuneration report
APN News & Media Limited and Controlled Entities
B: Executive remuneration policy and framework
To ensure that the Company is able to attract and retain executives capable of managing the consolidated entity’s operations and achieve its
performance goals, remuneration packages of executives are structured to:
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Create value for shareholders;
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Be competitive in the market;
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Align executive reward with company performance; and
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Reward the achievement of strategic objectives.
In 2010 the Company engaged independent external consultants, Ernst & Young, to undertake a review of the remuneration framework as it
relates to the Senior Executives. The review was undertaken to ensure our arrangements continue to be in line with evolving market practice
and our remuneration strategy while ensuring the appropriate mix of retention and performance focus. We believe the framework supports
our business strategy implementation and aligns to shareholders’ interests by:
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Having profit as a core component of STI;
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Focusing on sustained growth in earnings by using EPS as a key driver of the LTI;
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Aligning to shareholder interests by introducing a relative TSR performance focus to the LTI; and
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Having a significant portion of remuneration “at-risk”.
The framework provides a mix of fixed and variable pay, and a blend of short and long-term performance focussed elements.
The Company’s executive remuneration framework comprises three key components. The purpose of each element, and the approach to
determining the remuneration outcomes are outlined in the table below. The Company believes that a mix of fixed and variable (i.e. at-risk)
elements provides an appropriate retention, as well as performance, incentive.
Remuneration element
Form of reward
Purpose of award
Fixed
Fixed remuneration
Base salary,
superannuation and
other benefits
Recognise capability, experience and scope of role.
Variable
Short-term incentives Cash
Reward for achievement of annual Company and business unit targets
as well as individual performance.
Long-term incentives
Equity
Reward for achievement of long-term sustained Company performance.
Provides a multi-year performance focus and alignment to shareholder
value creation.
Other remuneration related costs
The Company incurs other remuneration related costs in respect of certain executives which are not regarded as part of the executive’s fixed
remuneration. Typically, such payments are ancillary to the executive’s employment such as rental assistance or family travel in circumstances
where the Company requires the executive to relocate. The costs include fringe benefits tax if applicable.
Retirement benefits
Retirement benefits are delivered to executives in the form of statutory superannuation contributions to a number of different funds.
All contributions made on behalf of executives are based on a percentage of fixed salary. No Senior Executives are members of defined
benefit schemes.
Approach to setting executive remuneration levels
The Remuneration Committee advises the Board on remuneration policy and principles generally, and makes recommendations on
remuneration packages and other terms of employment annually for Senior Executives.
The Company considers available market data for comparable roles in Australian organisations of similar size to APN. When positioning
against the market data, APN positions fixed remuneration toward the 75th percentile of the market and on-target total remuneration
between the median and the 75th percentile.
Securities Trading Policy
The Company’s Securities Trading Policy and Guidelines is outlined in the Corporate Governance section of this Annual Report. The policy
was updated effective 1 January 2011. Under the policy restricted persons, which includes key management personnel, are not permitted
to hedge any options, rights or similar instruments prior to them becoming vested or otherwise tradable under the applicable plan.
Voting and comments made at the Company’s 2011 Annual General Meeting
The Company received more than 98% of ‘yes’ votes on its remuneration report for the 2010 financial year. The Company did not receive any
specific feedback at the AGM or throughout the year on its remuneration practices.