IGO Interactive Annual Report 2020

DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 KMP AT RISK REMUNERATION IN FY20 The at risk components of Executive remuneration at IGO are intended to drive performance and long-term stability in shareholder returns without encouraging undue risk-taking. The mix of fixed and at risk remuneration varies depending on the role and reward grading of Executives and employees. It also depends on the performance of both the Company and the individual. The following is an overview of the total fixed and at risk remuneration for Executive KMP in FY20: MALUS AND CLAWBACK PROVISION IGO has a malus and clawback provision that allows the Board to reduce or clawback unvested and vested entitlements in certain circumstances, including in the case of fraud, dishonesty, gross misconduct, bringing the Group into disrepute, breach of obligations to the Group, material financial misstatements, where warranted due to risk behaviour, or other circumstances under law or Group policy. The EIP also allows the Board to reduce unvested awards where vesting is not justified or supportable for performance or other specified reasons. IGO STIP OUTLINE FOR FY20 The key elements of the Short-Term Incentive Program (STIP) as it relates to the Company’s KMP is provided below: STIP Opportunity The STIP opportunity offered to each Executive as a percentage of TFR is defined by the individual’s role and reward grade. The STIP opportunity is market benchmarked and reviewed by the Board annually. STIP payments are awarded 100% cash on or above threshold performance against a range of business objectives (Company KPI) and individual performance objectives (Individual KPI). Performance Targets The payment of a short-term incentive to KMP is an at risk component of the individual’s total remuneration given that a set of performance targets must be met prior to payment. These targets are based on metrics that are measurable, transparent, and achievable, and are designed to motivate and incentivise the Executive to drive to achieve high levels of performance aligned with Company objectives and near-term shareholder value creation. In FY20, the performance targets for KPI assessment reflected the following financial and non-financial components: • Health, Safety, Environment and Community • People and Culture • Growth and Strategy • Production Optimisation • Financial Performance Performance Assessment The Company employs a system of continuous performance feedback to drive performance and KMP performance is regularly reviewed by the Board throughout the financial year against the defined KPIs. A final performance assessment occurs annually following the completion of the financial year for each Executive. Executives are assessed on their contribution to the achievement of Company KPIs (80%), individual KPIs (20%) and their demonstrated support for the Company’s values and behaviours. Measurement Period The STIP is an annual program and operates from 1 July to 30 June each year. Termination of Employment In the event that an Executive’s employment terminates prior to the end of a financial year the Executive may or may not receive a pro rata payment, depending on the circumstances of the cessation of employment. Board Discretion The payments of all STIs are subject to Board approval. The Board has the discretion to adjust remuneration outcomes higher or lower to prevent any inappropriate reward outcomes, including reducing (down to zero, if appropriate) any STI payment. HOW PERFORMANCE WAS LINKED TO STIP OUTCOMES IN FY20 As part of the annual business planning process the Board determines the KPIs to reflect targets for the key strategic drivers of the business for the following year. Although significant progress was made in achieving Company KPIs and a range of other related programs of work, the final result was disappointing for several Key Result Areas (KRAs). SECTION 3. EXECUTIVE REMUNERATION IN FY20 COMPONENTS OF EXECUTIVE REMUNERATION AT IGO Executive remuneration at IGO is comprised of a mix of fixed and at risk components, as an integrated package, the purpose of which is to align Executive reward with shareholder outcomes, Executive performance and the retention of key talent. TFR and at risk remuneration is benchmarked at least annually by the People & Performance Committee. The table below provides an overview of the different remuneration components within the IGO framework. Objective Attract and retain the best talent Performance related remuneration (at risk) Reward current year performance Reward long-term sustainable performance Remuneration Component Total Fixed Remuneration (TFR) – includes salary and superannuation Short-Term Incentive (STI) – paid as cash Long-Term Incentive (LTI) – paid as service rights and performance rights Purpose TFR provides competitive ‘guaranteed’ remuneration with reference to: • Size and complexity of the role • Individual responsibilities and performance; and • Experience and skills. The STI ensures appropriate differentiation of pay for performance, for achievement of a combination of Company and Individual KPIs to drive achievement of near-term strategic objectives and retention of KMP. The LTI is focused on the achievement of stable mid to long-term shareholder returns through the Company’s long- term strategic objectives and retention. TOTAL REALISED EARNINGS FOR KMP IN FY20 The table below provides details of the actual remuneration earned during FY20 for KMP. Amounts include: • Total fixed remuneration received • The cash component of the STI earned as a result of business and individual performance for FY20 • Ordinary shares received as a result of service rights that vested during the year; and • Ordinary shares received as a result of performance rights that vested during the year 1 . Peter Bradford Keith Ashby Kate Barker Matt Dusci Andrew Eddowes Joanne McDonald Sam Retallack Ian Sandl Scott Steinkrug TFR STI Cash Service Rights vested 1. Nil were received for FY20. $65,000 $59,472 $64,500 $51,474 $186,500 $116,232 $69,500 $71,658 $63,500 $51,594 $68,500 $58,944 $69,000 $24,816 $85,000 $106,596 $870,000 $317,500 $279,264 $370,000 $350,000 $608,949 $860,000 $380,000 $348,750 $370,000 $385,577 $460,000 Managing Director and CEO Chief Operating Officer Chief Financial Officer Other Executive KMP TFR – 33% STI – 17% LTI – 50% LTI – 46% STI – 15% TFR – 39% LTI – 46% STI – 11% TFR – 43% LTI – 38% STI – 12% TFR – 50% 56 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 57