AS AT 30 JUNE 2011
20
Directors’ Report (continued)
Non-Executive Directors’ fees
The current base remuneration was set when the Company
listed on 12 December 2006. Non-Executive Directors’ fees
are determined within an aggregate Directors’ fee pool limit
of $1.2 million.
The following fee structure has applied since listing:
Base fees (per annum)
M Jackson (Chairman)
$150,000
A Abercrombie
$120,000
Other Non-Executive Directors
$80,000
Additional fees (per annum)
Audit & Risk Committee – Chairman
$10,000
Nomination Committee – Chairman
$10,000
Remuneration Committee – Chairman
$10,000
On 20 July 2011, the Board approved the frst increase in 5
years to the Non-Executive Directors fees, to apply from
1 July 2011 as follows:
Base fees (per annum)
M Jackson (Chairman)
$250,000
A Abercrombie
$160,000
Other Non-Executive Directors
$120,000
Additional fees (per annum)
Audit & Risk Committee – Chairman
$25,000
Remuneration Committee – Chairman
$25,000
These increased Director fees from 1 July 2011 remain within
the aggregate Directors’ fee pool limit of $1.2 million.
In addition to the above fees, Directors also receive
superannuation contributions required under government
legislation.
A Director is entitled to reimbursement for reasonable
travelling, accommodation and other expenses in attending
meetings and carrying out their duties.
Under clause 10.11 of the Company’s constitution, subject
to the Listing Rules and Corporations Act, the Company
may pay a former Director, or the personal representatives
of a Director who dies in ofce, a retirement beneft in
recognition of past services of an amount determined by
the Directors. The Company may also enter into a contract
with a Director providing for payment of the retiring beneft.
No such contracts have been entered into to date. Despite
having this clause in the Company’s constitution, the
Company does not intend to pay such benefts to Directors.
Executive pay
The executive pay and reward framework has four
components:
• base pay and benefts
• short-term performance incentives
• long-term incentives through participation in
the FlexiGroup Long Term Incentive Plan, and
• other remuneration such as superannuation
The combination of these comprises the executive’s total
remuneration.
Base pay
Executives are ofered a competitive salary that comprises
the components of base pay and benefts. Base pay for
senior executives is reviewed annually by the Remuneration
Committee to ensure the executive’s pay is competitive with
the market. An executive’s pay is also reviewed on promotion.
Superannuation
Superannuation is provided to employees under the terms
of the current federal government legislation.
Short-term performance incentives
Short-term performance incentives (“STIs”) vary according
to individual contracts; however for senior executives they
are broadly based as follows:
• A component of the STI is linked to the individual
performance of the executive (this is based on a number
of factors, including performance against budgets,
achievement of Key Performance Indicators (“KPIs”)
and other personal objectives).
• A component of the STI is linked to the fnancial
performance of the business or measured against budgets
determined at the beginning of each fnancial year.
All STI payments to senior executives are approved by the
Remuneration Committee and are usually paid in late August
or early September of the following fnancial year.
Using various proft performance targets and personal
performance objectives assessed against KPIs, the Company
ensures variable reward is only paid when value has been
created for shareholders.
For middle and lower level management, total STIs are linked
to individual performance measures and also to the fnancial
performance of the business.
The short-term bonus payments may be adjusted up or
down in line with under or over achievement against the
target performance levels. This is at the discretion of the
Remuneration Committee.
The STI target annual payment is reviewed annually.
Long-term incentives
Long-term incentives to the Chief Executive Ofcer and
certain senior employees are provided via the FlexiGroup
Long Term Incentive Plan (“LTIP”). Information on the plan is
detailed in Section D of this report.