The Board continues to set remuneration at a level that will attract directors and executives of high calibre. The two key elements are:
- base salary and fees, which are determined by reference to the market rate based on payments at similar sized companies in the industry; and
- performance incentives, which have two components – short term incentives based on achieving key performance indicators during the year and payable in cash, and long-term incentives payable in equity, the value of which depends on the share price of the company.
The Remuneration Committee determines the salary package of the company’s senior executives and reviews the compensation of the non-executive directors on an annual basis. Changes are approved by the Board as a whole.
The Board aims to ensure there is a strong link between company performance and remuneration and believes that the use of performance incentives ensures that company performance is reflected in the quantum of payments made to executives. Performance metrics are selected to ensure that the interests of management are aligned with those of shareholders. For short term incentives, key metrics are net profit after tax, used to directly link company earnings and cash bonuses, and other operational measures, the achievement of which provides the basis for future growth and profitability.