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Whitehaven Coal Limited : Annual Report 2012
Whitehaven Coal Limited -- Annual Report 2012 45 7.3 Introducing the new executive remuneration framework -- audited 7.3.1 Overview This section discusses the outcomes of the comprehensive remuneration review and the new remuneration framework which apply and will be in place for FY2013. The new fixed remuneration and STI arrangements were adopted with effect from 1 May 2012, while the first grants under the new LTI arrangements were made in September 2012. Full details of the new remuneration arrangements will be included in next year's Remuneration Report, however a summary of key terms is set out in this section 7.3. Remuneration principles • to ensure the Company's remuneration structures are equitable and aligned with the long-term interests of the Company and its shareholders and having regard to relevant Company policies; • to attract and retain skilled executives; • to structure short and long term incentives that are challenging and linked to the creation of sustainable shareholder returns; and • to ensure any termination benefits are justified and appropriate. Remuneration framework Total fixed remuneration (TFR) Short term incentives (STI) Long term incentives (LTI) • reviewed annually • benchmarked against peer companies in the materials, industrial and energy sectors • influenced by individual performance • determined based on a mix of financial and non-financial measures • for KMP, 30% of STI will be deferred into shares for a further 12 -- 24 month period • ability of the Remuneration Committee to reduce the number of deferred shares that vest if subsequent events show such a reduction to be appropriate ('clawback') • for KMP, the STI opportunity is set at 50% of TFR for target performance and 75% of TFR for stretch performance • made under the new plan, which provides the Remuneration Committee with the flexibility to determine the nature, terms and conditions of the grant each year • the FY2013 grant will operate as an award of performance rights (i.e. a right to receive a share in the Company if the relative TSR performance hurdle is satisfied) • for KMP, the LTI opportunity is set at 80% of TFR
Annual Report 2011
Annual Report 2013