IGO Interactive Annual Report 2020

DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 Performance Rights Measurement Period Testing occurs three years from 1 July of the relevant financial year. Cessation of Employment In the event that the Executive’s employment with IGO terminates prior to the vesting of all service and performance rights, outstanding unvested rights will be reviewed by the Board and may or may not vest, depending on the circumstances of the Executive’s cessation of employment. Board Discretion The Board has absolute discretion to adjust service rights vesting if, on assessment, service or behaviour criteria have not been met. The Board has absolute discretion to adjust performance rights vesting if, on assessment, absolute TSR is negative over the performance period. Peer Group The Company’s relative TSR performance for performance rights issued during FY20 will be assessed against a peer group comprised of members of the S&P ASX 300 Metals and Mining Index, as well as several mining companies listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). LTI - Non- executive Directors The overarching Employee Incentive Plan (EIP) permits Non-executive Directors to be eligible employees and therefore to participate in the plan. It is not currently intended that Non-executive Directors will be issued with share rights under the EIP and any such issue would be subject to all necessary shareholder approvals. FY20 LTIP OUTCOMES Name Position Service rights to be issued for FY20 period 1 $ Value Performance rights issued for FY20 period 2 Number Performance rights issued for FY19 period 3 Number Peter Bradford Managing Director & CEO 317,500 162,617 4 218,475 Keith Ashby Head of SHEQ & Risk 65,000 34,579 45,727 Kate Barker General Counsel 64,500 32,710 43,187 Matt Dusci Chief Operating Officer 186,500 83,738 110,161 Andrew Eddowes Head of Corporate Development 69,500 35,514 47,251 Joanne McDonald Company Secretary and Head of Corporate Affairs 63,500 32,710 43,187 Sam Retallack Head of People & Culture 68,500 34,579 45,727 Ian Sandl General Manager - Exploration 69,000 37,383 46,997 Scott Steinkrug Chief Financial Officer 85,000 68,785 83,140 1. Represents the $ value of the award of service rights to be granted for FY20 performance. Service rights will be issued in September 2020 based on the 5 day VWAP following the release of IGO’s 2020 Financial Statements. The service rights will vest in equal parts in September 2021 and September 2022. 2. Performance rights awarded at 20 day VWAP to 26 August 2019 of $5.35. 3. Performance rights awarded at 20 day VWAP to 25 August 2018 of $4.33. 4. Approved by shareholders at the 2019 Annual General Meeting. APPROVED BY SHAREHOLDERS AT THE 2019 ANNUAL GENERAL MEETING The IGO Limited Employee Incentive Plan (EIP) was approved by shareholders at the Annual General Meeting in November 2019. The number of eligible products able to be issued under the EIP is limited to 5% of the issued capital of the Company. The 5% limit includes grants under all plans made in the previous three years (with certain exclusions under the Corporations Act 2001 ). At the end of FY20 this percentage stands at 0.71%. There are no voting or dividend rights attached to the share rights. Performance Conditions for Performance Rights Relative TSR The TSR scorecard for the three year measurement period is determined based on a percentile ranking of the Company’s TSR results relative to the TSR of each of the companies in the peer group over the same three year measurement period. The Board considers that relative TSR is an appropriate performance hurdle because it ensures that a proportion of each participant’s remuneration is linked to the return received by shareholders from holding shares in a company in the peer group for the same period. Absolute TSR The increase in the Company’s absolute TSR will be measured over the three year measurement period. The Board considers that absolute TSR is an appropriate performance hurdle because it ensures KMP performance is rewarded when a year-on-year improvement in shareholder value is achieved. Reserve growth per share Reserve growth per share is defined as ore reserve growth in excess of depletion over the three year measurement period. The Board considers that reserve growth per share is an appropriate performance hurdle to align senior leaders of the business on the achievement of programs of work that achieve the Company’s strategic initiatives for brownfields/ greenfields opportunities and value accretive M&A opportunities important to growing shareholder value. EBITDA Average Margin EBITDA average margin is defined as a measure of the Company’s EBITDA as a percentage of its revenue averaged over the measurement period. The Board considers that EBITDA average margin is an appropriate performance hurdle to align senior leaders on ensuring the sustained operating profitability of the business over time and transparency for shareholders on the Company’s performance in comparison to the IGO peer group. Performance Rights Vesting Schedules Relative TSR The vesting schedule of the 25% of performance rights subject to relative TSR testing is as follows: Relative TSR performance Level of vesting Less than 50th percentile 0% Between 50th and 75th percentile 50% plus pro-rata straight line percentage between 50% and 100% 75th percentile or better 100% Absolute TSR The vesting schedule of the 25% of performance rights subject to absolute TSR testing is as follows: Absolute TSR performance % of Performance Rights that will vest 10% per annum return 33% Above 10% per annum and below 20% per annum return Pro-rata straight line percentage between 33% and 100% Above 20% per annum return 100% Reserve growth per share The vesting schedule of the 25% of performance rights subject to Reserve growth per share testing is as follows: Reserve growth in Ore Reserves per share performance Level of vesting <90% of Baseline Ore Reserves 0% 90% of Baseline Ore Reserves 33% Above 90% of Baseline Ore Reserves and below 100% Straight-line pro-rata between 33% and 66% 100% Baseline Ore Reserves 66% Above 100% of Baseline Ore Reserves and below 120% Straight-line pro-rata between 66% and 100% 120% and above Baseline Ore Reserves 100% EBITDA average margin The vesting schedule of the 25% of performance rights subject to EBITDA average margin testing is as follows: Group EBITDA Margin Level of vesting <20% 0% ≥ 20% 33% ≥ 30% 66% ≥ 40% 100% 60 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 61