IAG annual report—Concise

DIRECTORS’ REPORT
3.5 Retirement Benefits
IAG decided to freeze the operation of the Non-executive Director
retirement benefit scheme adopted by IAG in 2001 with effect from
1 September 2003.
The terms of the retirement benefits scheme provided for:
(i) any Non-executive Director of IAG who had completed five years’
continuous service with IAG (including service with any subsidiaries) at
the date of retirement, a retirement benefit equivalent to the last three
years’ Directors’ fees, employer superannuation contributions, committee
fees and fees for extra services received from IAG and its subsidiaries.
(ii) a pro-rata retirement benefit for Non-executive Directors who have
completed at least three years’ service but less than five years’ service
at the date of their retirement, based on a specified formula.
(iii) no retirement benefit to be paid to a Non-executive Director who had
served for a period of less than three years.
IAG determined that the frozen retirement benefits would be calculated
as follows:
(i) Non-executive Directors joining the Board from 1 September 2003
would have no retirement benefit.
(ii) for each current Non-executive Director who had served a minimum of
three years, the retirement benefit was assessed as if they had retired at
31 August 2003.
(iii) for a Non-executive Director with less than three years of service at
31 August 2003, a retirement benefit was assessed as if they had three
years of service as at that date, and then reduced on a pro-rata basis
based on their uncompleted period of service as a proportion of three
years. The retirement benefit was not subsequently payable to such a
Non-executive Director if they had less than three years of service as a
Non-executive Director at the date of their retirement.
Retirement benefits of $259,000 and $250,000 were paid to Ms Fisher
and Ms Keating, respectively, following their retirements from the Board
on 10 November 2004.
The following table sets out the frozen retirement benefits of the
remaining Directors who held office on 31 August 2003 and who have
continued in office since then:
RETIREMENT BENEFIT
$000
Mr JA Strong 295
Mr JF Astbury 184
Mr GA Cousins 169
Mr ND Hamilton 248
Mr RA Ross 232
On retirement, Directors may also be entitled to be paid a benefit from
their company funded superannuation. Such a benefit would be in
addition to the Director’s frozen retirement benefit.
No amounts have been accrued in the accounts of the Group for the
frozen retirement benefits of the remaining Directors who held office on
31 August 2003 and who have continued in office since, as the Board
has not exercised its discretion to pay these retirement benefits.
4. OTHER BENEFITS
Remuneration does not include premiums paid by IAG for an insurance
contract covering current and former Directors’ and executives’ liabilities
and legal expenses incurred in respect of the relevant office, as the
insurance policies do not specify premiums paid in respect of individual
Directors and executives and the terms of contract specifically prohibited
the disclosure of the premium paid. Insurance products provided by the
Group are also available to all directors and executives on the same
terms and conditions available to other employees.
During the financial year, the former Director (Mr N Whitlam) was paid
additional retirement benefit payments for his period of service as
chairman of IAG and its controlled entities. The payment amounted to
approximately $207,000, inclusive of his company funded superannuation
entitlements. Mr Whitlam was also paid interest on his entitlements.
5. EQUITY AND DEBT INSTRUMENT DISCLOSURE
(a) Holding of ordinary shares
The relevant interest of each specified executive and their personallyrelated
entities in ordinary shares of IAG are:
SHARES HELD
AT THE
BEGINNING
OF THE YEAR
SHARES
GRANTED AS
REMUNERATION
DURING THE YEAR
SHARES
RECEIVED
ON EXERCISE
OF PSRs
SHARES
RECEIVED
ON EXERCISE
OF PARs
NET MOVEMENT
OF SHARES DUE
TO OTHER
CHANGES (2)
TOTAL SHARES
HELD AT
THE END OF
THE YEAR
SHARES HELD
NOMINALLY AT
THE END OF
THE YEAR (1)
Mr IF Brown 211,769 34,560 - - 7,362 253,691 87,904
Mr AM Coleman 127,528 - - - (61,632) 65,896 65,896
Mr DA Issa - - - - - - -
Mr RJ Jackson 22,351 - - - (15,000) 7,351 7,351
Ms SJ Mostyn 16,083 - - - - 16,083 -
Mr DRA Pearce 7,806 - - - - 7,806 7,806
Mr MJ Pirone 17,748 - 28,640 - (15,000) 31,388 17,383
Mr DJP Smith 129,591 - - - - 129,591 5,951
Mr G Venardos 146,978 - - - (108,689) 38,289 34,403
Executives who ceased employment during the year:
Ms KL Baylis - - - - - * -
Mr LF Power 34,134 - - - - * -
Mr RJ Wagstaffe - - - - - * -
(1) Nominally held shares are included in the column headed total shares held at the end of the year. These shares are held by the specified executives’ personally-related entities.
(2) Net movement of shares relates to acquisition and disposal transactions by the executives and their personally-related entities during the year.
* These three executives ceased employment during the financial year. Information on shares held is only disclosed up to the date of their cessation.
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