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Whitehaven Coal Limited : Annual Report 2013
89 Whitehaven Coal Limited Annual Report 2013 8.5 Detail of components of executive KMP remuneration -- audited This section describes in greater detail the di erent components of executive KMP remuneration for FY2013. 8.5.1 Transitional arrangements in place for FY2013 In order to facilitate a smooth transition to the new remuneration framework, the following transitional arrangements were in place for FY2013: • the STI for FY2013 operated over a 14 month performance period from 1 May 2012 to 30 June 2013, in recognition of the fact that the executive KMP's previous STI crystallised on the date of the merger with Aston Resources. This resulted in a higher target STI opportunity for FY2013 (58% of TFR instead of the standard 50%). From FY2014 onwards the STI performance period will be 12 months, aligned with the 1 July -- 30 June nancial year; and • the LTI granted in FY2013 was divided into three equal tranches that will vest following a 2, 3 and 4 year period (respectively), subject to performance conditions. For FY2014, the LTI will be divided into two equal tranches capable of vesting following 3 and 4 year performance periods. 8.5.2 Mix and timing of remuneration in FY2013 Executive remuneration is delivered as a mix of xed and variable 'at risk' remuneration. Variable remuneration can be earned through STI and LTI. The di erent elements of remuneration re ect 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 diagram below illustrates the remuneration mix for executive KMP for FY2013. Remuneration mix for senior executives FY2013 (assuming target performance for at risk components) 43% Total xed remuneration 22% STI (at risk) 35% LTI (at risk) Given their existing signi cant shareholding in the Company, Mr Haggarty and Mr Davies elected not to receive an LTI award for FY2013. Accordingly, their remuneration mix was 63% TFR and 37% STI (at risk remuneration). The TFR and STI components were not increased to compensate their decision to forego any LTI entitlement. Directors' Report
Annual Report 2012