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APN
annual report
2011
remuneration report
APN News & Media Limited and Controlled Entities
C: Executive remuneration – detail
Short-term incentive (STI) plan
Senior Executives participate in an STI plan. The following table summarises the key terms.
Form of award, frequency
and timing
STIs are paid in cash subject to achieving specific performance objectives determined by the Board,
as outlined below.
STIs in respect of any year will be paid early in the next financial year following the finalisation of the
audited results.
Measures, weightings
and targets
Corporate roles
–
–
Seventy-five percent (75%) of an individual’s award is based on the achievement of target Group NPAT
performance.
–
–
Twenty-five percent (25%) of an individual’s award is assessed against individual Key Performance
Indicators linked to strategic objectives.
Business unit roles
–
–
Twenty-five percent (25%) of an individual’s award is assessed against target Group EBIT performance.
–
–
Fifty percent (50%) of an individual’s award is assessed against the relevant Business Unit’s EBIT.
–
–
Twenty-five percent (25%) of an individual’s award is assessed against individual Key Performance
Indicators linked to strategic objectives.
Performance assessment
and leverage
The maximum STI opportunity for participants, other than the Chief Executive Officer and the Chief
Development Officer, is 200% of the target STI opportunity.
The maximum STI opportunity for the Chief Executive Officer is 246% of the target STI opportunity.
The maximum STI opportunity for the Chief Development Officer is 167% of the target STI.
The maximum STI is payable if targets are exceeded by 10%, other than as detailed in the individual
contracts disclosed in this report.
In certain exceptional circumstances, the Remuneration Committee may take account of other factors
impacting on the year’s results as well as the extent to which other business objectives have been achieved.
The Remuneration Committee considers evaluation of financial performance to be a critical criterion and
one which can be objectively assessed against the actual audited results. The Remuneration Committee
considers that the use of objective and verifiable data to test the achievement of performance aids
transparency.
Service condition
Typically, no part of the STI is payable where an executive leaves APN’s employ during the year.
Long-term incentive (LTI) plan
The LTI plan provides for the grant of equity awards. Awards are split into two separate tranches, which vest independently. Seventy-five
percent (75%) of the total award vests based on the achievement of an EPS growth performance hurdle, while the remaining 25% of the total
award vests based on a relative TSR hurdle.
EPS tranche (75% of total annual award)
TSR tranche (25% of total annual award)
Form of award
Awards under the Plan are structured as rights to acquire fully paid ordinary shares in the Company for nil
consideration (i.e. Performance Rights). The number of Performance Rights (Rights) to be issued to Senior
Executives is based on the individual’s LTI opportunity, expressed as a percentage of fixed remuneration.
Rights were chosen as an appropriate vehicle as they are in line with market practice, provide alignment
to the interests of shareholders and have simpler tax treatment than share options.
Subject to the satisfaction of the performance hurdles, vested Rights will convert to fully paid ordinary
shares on the date APN announces its annual results to the Australian Securities Exchange (ASX),
immediately following the performance period of three years. Vested Rights will automatically convert
into shares without the requirement for the participant to exercise their Rights.
Eligibility
The CEO, and other Senior Executives (at the discretion of the Board), are eligible to participate in the
LTI plan.
Frequency of grants
It is envisaged that awards under the LTI plan will be made on an annual basis.