remuneration and performance
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 them appropriately and competitively. The Board regularly reviews our remuneration strategy. All employees have fixed remuneration, targeted at the market median, and most have the potential to earn a Short-Term Incentive (STI). STI is a variable element of remuneration and is only paid if both company and individual performance goals have been met.
Fixed Remuneration Fixed remuneration is reviewed each year based on data from independent remuneration specialists. Employees’ fixed remuneration is based on a matrix of their own performance and their current position when compared to our internal role bands and the market. Short term incentive STI values are set as a percentage of fixed remuneration, from 5% to 50% based on the complexity of the role. The Group Chief Executive has an STI as a percentage of fixed remuneration as set out later in this report. STI payments are determined following a review of Company and individual performance and paid out at a multiplier of between 0x and 1.0x for the Group Chief Executive, executive leadership team, and all eligible employees. This model is based on clear goals, differentiating performance, and rewarding delivery. Company performance goals are set and reviewed annually by the Board to align with shareholder value. If company goals are not met, including preliminary “gateway” goals, no STI is payable. In the year ended 30 June 2018, the company goals were: • 40% Disciplined growth and cost efficiency (EBITDA performance against budget); • 40% Customer and regulatory outcomes; • 20% Sustainability. Individual performance goals for all employees are tailored to their role, with 50% of the goals based on ‘what’ they achieve and 50% based on ‘how’ they perform their role, which includes a health and safety component for all employees. As an example of how STI is calculated, an employee with fixed remuneration of $80,000 and an STI element of 10% may receive between $0 and $8,000 (0x to 1.0x their STI percentage) depending on the level of company performance and their individual performance. The Group Chief Executive remuneration The Group Chief Executive’s remuneration consists of fixed remuneration and an STI. There is no Long-Term Incentive (LTI) or share options. This is reviewed annually by the Board after reviewing company performance, the Group Chief Executive’s individual performance and advice from external remuneration specialists.
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