IGO Interactive Annual Report 2020

DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 DIRECTORS’ REPORT— REMUNERATION REPORT 30 JUNE 2020 SECTION 5. PLANNED REMUNERATION CHANGES FOR FY21 In uncertain times the Board and Executive team appreciate the importance of competitive remuneration to support our employees to deliver the sustained and enduring performance that drives value for our shareholders and community partnerships. Looking ahead, the Board and Executive team have identified potential pressure on sourcing talent through the continued challenges associated with the mobility of people around the globe in a COVID-19 environment and as such will place renewed focus on sourcing and engagement strategies to recruit and retain local talent. The Company reviews Executive remuneration practices annually. In determining any changes to remuneration for Executives in FY21, the Board considered benchmarked information and shareholder feedback to adopt a balanced approach that supports the achievement of our strategic plan. As a result of the benchmarking conducted in FY20, and as a reflection of the uncertain economic environment anticipated into FY21, the Board have taken a restrained approach to the quantum of change proposed in FY21 with few material alterations made to the remuneration structure of IGO KMP. The Board is however mindful that for some sectors the demand for talent will drive a level of wage pressure that will require careful consideration. To balance this uncertainty a mid-year review of remuneration will be conducted, with adjustments made for individuals to the extent that their remuneration level puts the retention of the required skillsets at risk. Completed changes and/or progress towards remuneration objectives will be reported in more detail in the FY21 Remuneration Report, however a summary of the key elements of the proposed FY21 program are provided below: KMP TFR • There are no changes planned for the TFR of KMP in FY21; and • A mid-year parity review of remuneration will be conducted if market conditions change as a result of the ongoing COVID-19 environment to the extent that salaries require adjustment or external market benchmark testing indicates the requirement for an out of cycle review. The Board’s objective is to ensure that market expectations for Executive remuneration, given external economic conditions, is balanced with a combination of competitive pay for retention of Executives. Company Scorecard Gating In FY21 the Board will introduce an additional level of discretion to the gating of KPIs as follows: • The IGO Board will have the discretion to reduce KPI outcomes by up to 100% of the cash component of variable incentives in the event of occurrence of any event that is classified as “catastrophic” in the Company’s Risk Matrix*; and • The Board will have the discretion to reward outstanding performance that falls outside of the existing KPI program for teams or individuals that have created significant additional value for shareholders and/or employees. The Board’s objective is to improve the mechanism by which adjustments in Executive variable reward can be made in an unpredictable environment. In exercising this discretion, the Board will consider causal factors leading to the event. * Assessment of this event will be based on the Company’s Common Management System – Risk Management Matrix available at www.igo.com.au Short-Term Incentive • More clearly defined performance thresholds and targets will be used to describe the required levels of performance and enhance the transparency of reporting; and • No changes will be made to the STIs of KMP in FY21. Following the changes made as a result of peer group benchmarking in FY20 the Board believes that the current levels of short-term, at risk incentives are appropriately competitive for all KMP. Long-Term Incentive Following the adjustments made to the classification of service rights into the LTIP in FY20, and subsequent market and peer group benchmarking in FY20, there will be no changes made to the LTIs of KMP in FY21. SECTION 4. NON-EXECUTIVE DIRECTOR REMUNERATION The remuneration of Non-executive Directors is determined by the Board within the maximum amount approved by shareholders in general meeting. Non-executive Directors are not entitled to retirement benefits other than statutory superannuation or other statutory required benefits. Non-executive Directors do not participate in share or bonus schemes designed for Executive Directors or employees. TOTAL REALISED EARNINGS Name Year Cash fees $ Superannuation $ Total $ Debra Bakker 2020 127,854 12,146 140,000 2019 123,288 11,712 135,000 Peter Bilbe 2020 239,545 21,690 261,235 2019 210,046 19,954 230,000 Kathleen Bozanic 1 2020 81,397 7,733 89,130 Peter Buck 2020 128,288 11,712 140,000 2019 123,288 11,712 135,000 Geoffrey Clifford 2 2020 49,721 4,723 54,444 2019 118,721 11,279 130,000 Keith Spence 2020 127,854 12,146 140,000 2019 123,288 11,712 135,000 Neil Warburton 2020 109,589 10,411 120,000 2019 109,589 10,411 120,000 Total Non-executive Director remuneration 2020 864,248 80,561 944,809 2019 808,220 76,780 885,000 1. Ms Bozanic was appointed a Non-executive Director effective 3 October 2019. 2. Mr Clifford retired as a Non-executive Director effective 20 November 2019. The remuneration of Non-executive Directors is fixed to encourage impartiality, high ethical standards and independence on the Board. The available Non-executive Directors’ fees pool is $1,500,000 which was approved by shareholders at the Annual General Meeting on 16 December 2015, of which $930,000 was being utilised at 30 June 2020 (2019: $885,000). Non-executive Directors may provide additional consulting services to the Group, at a rate approved by the Board. No such amounts were paid to Directors during the current or prior year. Following small adjustments to the remuneration of the Board and Committee Chairs in FY20, and based on market data from both the IGO peer group and the market more broadly, there will be no changes to Board or Committee Chairs’ or Non-executive Directors remuneration in FY21. Details of Non-executive Director fees are as follows: Approved 2021 30 June 2020 30 June 2019 Non-executive Director base fees Board Chairman 250,000 250,000 230,000 Board Member 120,000 120,000 120,000 Board Member Committee Fees Chair Audit Committee 20,000 20,000 15,000 Chair People & Performance Committee 20,000 20,000 15,000 Chair Sustainability & Risk Committee 20,000 20,000 15,000 Chair Nomination & Governance Committee 20,000 20,000 10,000 Committee Members Nil Nil Nil 62 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 63