2013 Apr 15 Annual Report 2012 - Phosphagenics

Directors’ Report continued
REMUNERATION REPORT (AUDITED) (CONTINUED)
Non executive director remuneration
Objective
The board seeks to set aggregate remuneration at a level that provides the Company with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The constitution and the ASX listing rules specify that the aggregate remuneration of non-executive directors shall
be determined from time to time by a general meeting. The latest determination was at the annual general meeting
held on 29 January 2004 when shareholders approved an aggregate remuneration of $300,000 per year.
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed
periodically. The board considers advice from external consultants as well as the fees paid to non-executive
directors of comparable companies when undertaking the annual review process. A review was conducted in
February 2012 resulting in a 10.5% increase to remuneration of non-executive directors, effective 1 March 2012.
From 1 March 2012 each non-executive director receives a base fee of $42,000 (previously $38,000)
for being a director of the Group. The non-executive directors do not receive retirement benefi ts, nor do
they participate in any short term incentive programs. The remuneration of non-executive directors for
the period ending 31 December 2012 and 31 December 2011 is detailed in the tables within this report.
Executive remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities so as to align the interests of executives with those of shareholders to retain
executives at the Company to ensure that total remuneration is competitive by market standards.
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Structure
In determining the level and make-up of executive remuneration, the board engages external consultants
as needed to provide independent advice. The process consists of a review of company and individual
performance, relevant comparative remuneration in the market and internally, and where appropriate,
external advice on policies and practices.
Remuneration packages contain the following key elements:
• Fixed remuneration (base salary, superannuation and non-monetary benefi ts)
• Variable remuneration long term incentive (rights issued under the Employee Conditional Rights
Scheme (ECRS) and previously under the Employee Share Option Plan (ESOP))
Executive directors’ remuneration was reviewed in December 2011 resulting in a 23% increase for Dr Esra
Ogru commencing in January 2012, with no change to Mr Harry Rosen’s remuneration. Additionally,
in June 2012, the Remuneration Committee approved and paid a short term discretionary cash bonus
to Dr Esra Ogru. Remuneration of other non director executives and key management personnel were
reviewed in December 2011, resulting in an average increase of 10/% effective 1 January 2012.
Fixed remuneration
Objective
Fixed remuneration is reviewed annually by the board of directors. The process consists of a review
of company and individual performance, relevant comparative remuneration externally and internally and,
where appropriate, external advice on policies and practices. As noted above, the committee has access
to external advice independent of management.
Structure
Executives are given the opportunity to receive their fi xed (primary) remuneration in a variety of forms
including cash and fringe benefi ts such as motor vehicles. It is intended that the manner of payment
chosen will be optimal for the recipient without creating undue cost for the Group. Apart from termination
benefi ts which accrue under statute such as unpaid annual leave, long service leave and superannuation
benefi ts, there are no post employment retirement benefi ts.
DIRECTOR’S REPORT