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Whitehaven Coal Limited : Annual Report 2012
46 7. REMUNERATION REPORT (CONTINUED) 7.3 Introducing the new executive remuneration framework -- audited (continued) 7.3.2 Transitional arrangements In order to facilitate a smooth transition to the new remuneration framework, the following transitional arrangements have been implemented for FY2013: • the STI for FY2013 will operate over a 14 month performance period from 1 May 2012 to 30 June 2013, in recognition of the fact that the senior executives' previous STI crystallised on the date of the Merger. This will be reflected in a slightly higher target STI opportunity for FY2013 (58% of TFR instead of the standard 50%). From FY2014 the STI performance period will be 12 months, aligned with the 1 July -- 30 June financial year; and • the LTI granted in FY2013 will be divided into three equal tranches that will vest following a 2, 3 and 4 year period (respectively), subject to performance conditions. Going forward, it is likely the LTI will be divided into two equal tranches capable of vesting following a 3 and 4 year performance period. Further details of the new STI and LTI arrangements are set out below. 7.3.3 Mix and timing for delivery of remuneration Executive remuneration for FY2013 will be a mix of fixed remuneration and variable remuneration. Variable remuneration can be earned through STI and LTI. The different elements of remuneration reflect a focus on both short-term and longer- term performance, and delivery of rewards is staggered over a multiyear timeframe to encourage sustained performance and retention. The diagrams below illustrate the remuneration mix for senior executives for FY2013. Remuneration mix for Executive Directors FY2013 Remuneration mix for other senior executives FY2013 (assuming target performance for STI component) (assuming target performance for at risk components) Total fixed remuneration = 63% STI (at risk) = 37% Total fixed remuneration = 42% STI (at risk) = 24%* LTI (at risk) = 34% The Executive Directors have elected not to participate in the LTI for FY2013 given they already hold a significant shareholding in the Company. Their TFR and STI components will not be increased to compensate for their decision to forgo any LTI entitlement. *As a one-off for FY2013, the target STI opportunity will be 58% of TFR, consistent with the 14 month performance period. DIRECTORS' REPORT
Annual Report 2011
Annual Report 2013