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Directors’ Report (continued) d) Non-executive directors’ remuneration structure Fees and payments to non-executive directors (NEDs) reflect the demands which are made upon, and the responsibilities of, these directors. NED fees are reviewed annually by the Board. When setting changes to fees and other compensation for NEDs, the Board has taken the advice of independent remuneration consultants to ensure NED fees are appropriate and in line with the market. The Chairman’s fees are determined independently to the fees of NEDs and are based upon comparative roles in the external market provided by independent remuneration consultants. The Deputy Chairman’s fees are also determined independently to the fees of NEDs having regard to additional duties the Deputy Chairman may be required to perform. NED fees have remained unchanged since 1 July 2010. NEDs do not receive performance-based pay, however a salary sacrifice plan (AHG Executive Share Plan) for directors and senior executives was approved by shareholders at the 2007 Annual General Meeting. However, to date, it has not been utilised. If the Group elects to make the AHG Executive Share Plan operable it will enable directors and senior executives to sacrifice a portion of their directors’ fees, salary, bonus or commission, as the case may be, in exchange for shares in the Company. NED fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum director fee pool currently stands at $750,000 per annum and was approved by shareholders at the 2010 Annual General Meeting. The fees (including superannuation) that were applicable for the year ended 30 June 2012 are outlined in the table below, and remain unchanged from the year ended 30 June 2011: Chairman $170,000 Deputy Chairman $127,000 Other non-executive directors $87,200 Additional fees for special duties: Audit and Risk Management Committee Chairman $14,500 Audit and Risk Management Committee Member $7,265 Remuneration and Nomination Committee Chairman $7,265 Remuneration and Nomination Committee Member $3,630 Strategy Committee Chairman $7,265 Strategy Committee Member $3,630 The Company makes superannuation contributions to meet the minimum level of superannuation contributions required under any applicable legislation. Payment of Expenses In addition to remuneration, NEDs are entitled to receive reimbursement for travelling and other expenses that they properly incur in attending directors’ meetings, attending any general meetings of the Company or in connection with the Company’s business. Payment for Extra Services Any NED called upon to perform extra services or undertake any executive or other work for the Company beyond his or her general duties, may be remunerated either by a fixed sum or a salary as determined by the directors. This may be either in addition to or in substitution for the NED’s share in the usual remuneration provided. No NED is currently being remunerated for services undertaken beyond their general duties. Effect of Cessation of Office Under the Company’s Constitution, with the approval of the Company in general meeting, the directors may, upon a director ceasing to hold office or at any time after a director ceases to hold office, whether by retirement or otherwise, pay to the former director or any of the legal personal representatives or dependents of the former director in the case of death, a lump sum in respect of past services of the director of an amount not exceeding the amount either permitted by the Corporations Act 2001 or ASX Listing Rules. The Company may contract with any director to secure payment of the lump sum to the director, his or her legal personal representatives or dependants or any of them, unless prohibited by the Corporations Act 2001 or the ASX Listing Rules. No such amounts were paid during the current financial year. Financial Benefit A director must ensure that the requirements of the Corporations Act 2001 are complied with in relation to any financial benefit given by the Company to the director or to any other related party of the director. The Company does not make loans to directors or provide guarantees or security for obligations undertaken by directors except as may be permitted by the Corporations Act 2001. 52 Automotive Holdings Group
2012 Annual Report For the year ended June 2012 e) Link between performance and remuneration outcomes Performance of AHG The following graphs illustrate the link between the Company’s performance, shareholder wealth and key management personnel remuneration for the year ending 30 June 2012 and the previous 4 financial years. The first graph illustrates the link between AHG’s profit before tax and payments made under the STI plan. 100,000 3,000 Profit before Tax* 80,000 60,000 40,000 20,000 2,250 1,500 750 Remuneration Report – STI** 0 000 2008 2009 2010 2011 2012 Profit before Tax* Remuneration Report – STI** * Profit before tax is profit from continuing operations before income tax expense. ** STI remuneration reflects the STI amounts that were paid out to executives. The second graph illustrates the link between AHG’s basic operating 1 earnings per share and dividends to shareholders. 30.0 30.00 Operating 1 EPS 24.0 18.0 12.0 6.0 24.00 18.00 12.00 6.00 Dividend (cents) 0.0 000 2008 2009 2010 2011 2012 Operating 1 EPS (cents) Dividend (cents) 1 Operating results exclude non-recurring items (including impairment, stamp duty and other fees associated with acquisition-related activities, GST on holdback and sale of investments) Automotive Holdings Group 53
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