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Whitehaven Coal Limited : Annual Report 2013
87 Whitehaven Coal Limited Annual Report 2013 8.4 Remuneration principles and framework -- audited 8.4.1 Overview This section discusses the core principles and components of the Company's new remuneration framework. 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 bene ts are justi ed 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 • in uenced by individual performance • determined based on a mix of nancial and non- nancial measures • for KMP, 30% of STI is 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 • provides the Remuneration Committee with the exibility to determine the nature, terms and conditions of the grant each year • operates as an award of performance rights (i.e. a right to receive a share in the Company if the relative TSR performance hurdle is satis ed) • for KMP, the face value of the LTI opportunity is currently set at 80% of TFR 8.4.2 Remuneration governance Role of the Board and Remuneration Committee The Board is responsible for ensuring that the Company's remuneration structures are equitable and aligned with the long-term interests of the Company and its shareholders. Consistent with this responsibility, the Board has established a Remuneration Committee, which is currently comprised entirely of independent Directors. The role of the Remuneration Committee is to: • review and approve the remuneration of the senior executives; • review and approve the remuneration policies and practices for the Group generally, including incentive plans and other bene ts; and • review and make recommendations to the Board regarding the remuneration of Non-executive Directors. Further information regarding the Remuneration Committee's role, responsibilities and membership is set out in the Corporate Governance Statement on pages 77 to 83 of this Annual Report. Directors' Report
Annual Report 2012