DIRECTORS’ REPORT (cont.)
AUDITED REMUNERATION REPORT This remuneration report, which forms part of the directors’ report, contains information about the remuneration of Saunders International Limited’s directors and its key management personnel for the financial year ended 30 June 2023. The Remuneration Report sets out, in accordance with section 300A of the Corporations Act: (i) the Group’s governance relating to remuneration, (ii) the policy for determining the nature and amount or value of remuneration of key management personnel; (iii) the various components or framework of that remuneration; (iv) the prescribed details relating to the amount or value paid to key management personnel, as well as a description of any performance conditions; (v) the relationship between the policy and the performance of the Group. Key management personnel are the non-executive directors, the executive directors and employees who have authority and responsibility for planning, directing and controlling the activities of the entity. REMUNERATION POLICY AND GOVERNANCE The board of directors, through the Remuneration Committee, review and approve remuneration of the non-executive directors, the managing director and key management personnel. Remuneration policy is determined by the needs of the Group and the individual talents, capabilities and experience of relevant executives, and the need to attract and retain talent are considered important factors in assessing remuneration. NON-EXECUTIVE DIRECTORS Non-executive directors are paid fees and, where applicable, compulsory superannuation contributions. The current fees are based on the level of fees for comparable listed companies and were reviewed during the year. The non-executive directors have not been granted options and have not participated in the Employee Share Plan or the Performance Rights Plan. MANAGING DIRECTOR The managing director is remunerated on a salary package basis which is a component of a formal employment contract. The salary package is considered to be appropriate for the experience and expertise needed for the position and is comparable to other similar sized companies and operational areas of larger companies. The salary package contains a fixed component and a variable bonus component. The bonus is based on an annual performance appraisal as conducted by the remuneration committee of the board of directors. The performance is measured against a range of objectives set annually by the board. The important objectives are safety, quality, personnel development, quantitative Group financial performance and certain other (subjective and objective) criteria.
The managing director has also participated in the Employee Share Plan and the Performance Rights Plan. Mark Benson holds 269,100 options within the Employee Share Plan and 967,282 performance rights under the Saunders International Performance Rights Plan. KEY MANAGEMENT PERSONNEL Key management personnel are remunerated based on a number of factors, including experience, qualifications, job level and over performance of the company and individual. The remuneration includes a variable short-term incentive (STI), between 0%-60% of salary component. This incentive rewards the key management personnel achieving; financial and operational key performance indicators; progress with the delivery of the Group’s business plan and strategic objectives; and specific goals in relation to the development of people within the Group and its profile within the business community. Examples of key performance indicators measured to assess STI for the Key Management Personnel and Managing Director include: y achievement of target work in hand levels at 30 June of each year to ensure the sustainability of revenue in subsequent years; y targets set in relation to the achievement of the Group’s business plan such as the diversification of the business and entry into new markets; and y targets set for safety performance based on Total Recordable Injury Free. These indicators form approximately 50% of assessable STI with the remaining 50% focused on the Financial Performance of the Group; EBIT and Cash at hand. Key management personnel as disclosed on page 42 of the remuneration report have participated in the Employee Share Plan. LONG-TERM INCENTIVE The board of directors have considered the issue of long-term incentive as a component of the remuneration of executive directors and key management personnel. Saunders operates two Long-Term Incentive (“LTI”) plans, which are described below: y Employee Share Plan y Performance Rights Plan As of the date of this report a number of executive officers’ own shares in the Group or interests via the Employee Share Plan and the Performance Rights Plan. The breadth and depth of share ownership fosters an alignment of objectives between shareholders and directors and management of the Group.
Annual Report 2023 39
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