Governance report
Short-Term Incentive Prior to any STI payment being available to eligible employees the conditional gateway goals (Health and Safety – no fatalities; Financial – achieving at least 95% of budget) must be met. The STI Scheme for FY23 recognises Group and business unit-level achievement of financial, Symphony, customer, health and safety and decarbonisation performance outcomes within the at-risk component of employees’ remuneration. The STI Scheme does not reward individual performance. The at-risk percentage of fixed remuneration for the FY23 STI Scheme ranges from 20% to 50% of base salary depending on the role. Company performance goals are set and reviewed annually by the Board to align with business and financial objectives. Customer goals include measures of customer satisfaction, as well as operational performance such as electricity network standards as set by the Commerce Commission (SAIDI/SAIFI), gas response to emergency and the achievement of customer service level agreements. STI payments are determined following a review of company performance and paid out at between 0% and 100% for all eligible employees. Performance against the at-risk STI element is capped at 100%. As an example of how STI is calculated, an employee with fixed remuneration of $150,000 and an STI element of 20% may receive between $0 and $30,000 (0% to 100% of their STI) depending, at the Board’s discretion, on the level of company performance once the gateway goals have been achieved. STI Scheme payments relating to the financial year ended 30 June 2023 are delivered as a taxable cash payment and are payable on completion of the annual audited financial statements. Payments relating to FY23 are therefore paid in FY24.
encouraging of difference, free from harassment and discrimination, and allows our people to be themselves, to thrive and succeed. Inclusion is closely linked to wellbeing and without creating an inclusive workplace, the company cannot expect diversity to thrive. It recognises that diverse backgrounds, work for Vector’s people, improve engagement, make teams stronger, lead to greater innovation and performance and contribute to more meaningful relationships with customers. Responsibility for workplace diversity and the setting of measurable objectives for approval by the Board is held by management on behalf of the Board. Remuneration experiences and perspectives lead to a better experience of Vector’s goal is to provide fair, reasonable and competitive remuneration for its directors to ensure that it is able to attract and retain high-calibre directors who have the skills, experience and knowledge to increase entity value, to the benefit of all shareholders. Vector’s directors do not participate in an incentive scheme or share scheme. Directors do not receive any options, bonus payments or incentive-based remuneration. The company does not have a scheme for retirement benefits Committee is responsible for the review of directors’ remuneration and, from time to time, making recommendations in relation to the level of fees in accordance with the Remuneration Policy. A directors’ fee pool was approved by shareholders at the 2022 Annual Shareholders’ Meeting. Directors receive different fees for membership to be given to directors. The People and Remuneration
reimbursed for costs associated with carrying out their duties. Fees payable to Vector’s directors for FY23 were as follows:
DIRECTOR
FEE ($)
J Mason
207,650 133,825 116,325 116,325 116,325
P Rebstock
A Bell
A Carter
P Hutchison
D McKay B Turner A Urlwin
55,663
124,825 124,825
Remuneration framework Vector’s remuneration framework is designed to attract and retain high-performing individuals, to support the delivery of the company’s strategy and vision, and reward its people appropriately and competitively. The People and Remuneration Committee assists the Board in overseeing Vector’s Remuneration Policy. Vector’s Remuneration Policy is that of a total remuneration framework which comprises fixed remuneration, plus an at-risk component in the form of a Short-Term Incentive (STI). STI is a variable element of remuneration and is only paid, at the Board’s discretion, if financial and health and safety gates are met, and company performance goals have been achieved. The STI applies to executives and their direct reports. Fixed remuneration Fixed remuneration is reviewed periodically based on data from remuneration is based on a matrix of their own performance and their current position in their salary band when compared to Vector’s internal role bands and the market. independent remuneration specialists. Employees’ fixed
of the Board, membership of committees and chair roles. All directors are also entitled to be
Company performance goals For this financial year, Vector’s goals were:
CORPORATE BUs
ELECTRICITY
GAS TRADING
AREA OF FOCUS
& GAS METERING
FIBRE
HRV POWERSMART
Financial
45% 20% 20%
15%
45% 20% 20%
65%
45% 20% 20%
65%
65%
Symphony
20% 50%
0%
0%
0%
Customer
20%
20%
20%
People
10%
10%
10%
10%
10%
10%
10%
Decarbonisation
5%
5%
5%
5%
5%
5%
5%
TOTAL
100% 100% 100% 100% 100% 100%
100%
40
Vector Annual Report 2023
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