Performance Conditions for Performance Rights Relative Total Shareholder Return (RTSR) The RTSR 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 RTSR 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 Total Shareholder Return (ATSR) The increase in the Company’s ATSR will be measured over the three-year measurement period. The Board considers that ATSR is an appropriate performance hurdle because it ensures that Executive 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 delivery of programs of work that achieve the Company’s strategic initiatives for brownfields and 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 underlying 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. Climate Change Response Progress IGO’s climate change response progress will be assessed based on the achievement of carbon neutrality of the Nova Operation during the three-year measurement period. The Board considers that climate change response progress is an appropriate performance hurdle as climate change is a critical global risk. For the performance testing of this measure, carbon neutrality will be defined as being able to demonstrate during the performance period that Scope 1 and 2 emissions at the Nova Operation have been (i) abated through emissions reduction programs, and/or (ii) offset through IGO’s investments in sequestration and natural carbon removal programs, which are recognised ACCUs issued by the Clean Energy Regulator. Relative People and Culture Performance The relative people and culture performance will be determined based on IGO’s average percentile engagement score ranking amongst the companies surveyed each year by Feedback Works for the three-year measurement period. The Board considers that relative people and culture performance is an appropriate performance hurdle to ensure that senior leaders maintain a sustained focus on culture and employee engagement across the business and, over time, as a strategic driver for employee retention and shareholder value creation in comparison to the IGO peer group. Performance Rights Vesting Schedules RTSR The vesting schedule of the 20% of performance rights subject to RTSR testing is as follows: RTSR performance Level of vesting Less than 50th percentile 0% Between 50th and 75th percentile 50% plus straight-line pro-rata between 50% and 100% 75th percentile or better 100% ATSR The vesting schedule of the 20% of performance rights subject to ATSR testing is as follows: ATSR performance Level of vesting Less than 10% per annum return 33% Between 10% and 20% per annum return 33% plus straight-line pro-rata between 33% and 100% 20% per annum return or better 100% Reserve Growth Per Share The vesting schedule of the 20% of performance rights subject to reserve growth per share testing is as follows: Reserve growth in Ore Reserves per share performance Level of vesting Less than 100% of Baseline Ore Reserves 0% Between 100% of Baseline Ore Reserves and below 110% 50% plus straight-line pro-rata between 50% and 100% 110% Baseline Ore Reserves or more 100% EBITDA Average Margin The vesting schedule of the 20% of performance rights subject to EBITDA average margin testing is as follows: Group EBITDA Margin Level of vesting Less than 20% average margin 0% Between 20% and 40% average margin 33% plus straight-line pro-rata between 33% and 100% 40% average margin or better 100% Climate Change Response Progress The vesting schedule of the 10% of performance rights subject to Climate change response progress is as follows: Climate Change Response Progress Level of vesting Nova Operation Carbon Neutrality not achieved 0% Nova Operation Carbon Neutrality achieved 100% Relative People and Culture Performance The vesting schedule of the 10% of performance rights subject to relative people and culture performance is as follows: Relative People & Culture performance Level of vesting Less than 50th percentile 0% Between 50th and 75th percentile 50% plus straight-line pro-rata between 50% and 100% 75th percentile or better 100% IGO ANNUAL REPORT 2022— 69 68 —IGO ANNUAL REPORT 2022
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