Remuneration report
Executive remuneration mix The remuneration mix is designed to achieve a balanced reward for achievement of short-term objectives and the creation of long-term sustainable value. The amount of remuneration received by Executive KMP each year depends on the achievement of business and individual performance. Fixed remuneration (TEC) was set with reference to the market median, using the ASX30 companies as the primary reference. Remuneration packages (including TEC levels) are reviewed by the Remuneration, People and Culture Committee taking into consideration an individual’s role, experience and performance, as well as relevant comparative market data provided by remuneration consultants. TEC levels are also reviewed after a change in role. The following diagrams show the minimum, target and maximum total remuneration opportunity for CEO and other Executive KMP. Each component is determined as a percentage of the total remuneration package. Base salary and superannuation received by each Executive KMP are disclosed on page 109. The maximum opportunity represented below is the most that can be awarded to any individual under the Group’s STI Plan and is only achieved in exceptional circumstances.
Remuneration mix
TEC
STI
LTI
CEO and Other Executive KMP
100%
Fixed
CEO 1
29%
14.5%
14.5%
42%
Target
Maximum
25%
19%
19%
37%
Other Executive KMP
41%
13.5%
13.5%
32%
Target
Maximum
36%
18%
18%
28%
KMP Remuneration
Target 2
Maximum 2
Maximum 2 (face value)
Base salary and statutory superannuation
Opportunity
CEO 147% of TEC Other KMP 80% of TEC
CEO
100% of TEC 150% of TEC
Other KMP 67% of TEC
100.5% of TEC
50% – Securities deferred for two years
Performance awards tested end of year four; 50% relative TSR; and 50% FCF
Delivery
Cash
50% – Cash
Executive KMP remuneration outcomes
STI outcomes STI awards are determined with reference to an assessment of performance against individual KPIs and Group performance measures. When the Board and the Remuneration, People and Culture Committee consider the performance against each element, several factors are considered that may result in the exercise of Board discretion for the benefit or detriment of the executives. For example: • prevailing external business and economic factors beyond the control of the business and which may impact performance.
• unforeseen factors that may not have been known at the beginning of the performance period, but which are relevant to performance over the performance period. • whether budgetary assumptions that were made when setting performance targets remain appropriate and whether conditions are potentially better or worse when compared with those assumptions. • the degree of difficulty and complexity associated with achieving the targets, as related to both the internal and external environment.
In assessing whether to exercise discretion for any of these factors, the Board will have regard for the interests of all stakeholders including security holders. Transurban’s strategic priorities are cascaded via the CEO’s KPIs to other Executives, along with other functional measures. The Board assessed the Group’s and CEO’s performance as follows (KPIs that are commercially sensitive have been excluded).
1 A s at the date Scott Charlton ceased to be Executive KMP, Scott had a target remuneration mix comprising 29% fixed remuneration, 29% STI and 42% LTI. Prior to her appointment as CEO, Michelle Jablko held the role of CFO and had a target remuneration mix comprising 41% fixed remuneration, 27% STI and 32% LTI 2 T he potential impact of future security price movements is not included in the value of deferred STI awards or LTI awards
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