AWB Limited - 2004 Annual Report
AWB Limited - 2004 Annual Report
AWB Limited - 2004 Annual Report
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DIRECTORS' REPORT (continued)<br />
DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS (continued)<br />
Emoluments of executives of <strong>AWB</strong> <strong>Limited</strong><br />
Short-term Amortised value Retention, termination<br />
Base fee Superannuation incentive of performance and retirement<br />
(2002/03 year) (a) rights issued (b) Other (c) benefits (d)<br />
$ $ $ $ $ $<br />
Richard Fuller 259,895 11,148 – 11,446 23,153 –<br />
Peter Geary 418,828 35,138 – 20,603 30,273 –<br />
Jill Gillingham 413,751 67,000 – 20,603 4,566 –<br />
Paul Ingleby 616,520 11,148 – 34,325 26,984 –<br />
Marcus Kennedy 412,520 11,148 – 11,910 68,816 –<br />
John Maher 334,551 20,436 – – 18,913 125,000<br />
Sarah Scales 435,415 11,437 – 17,503 7,168 –<br />
Charles Stott 414,836 11,148 – 16,489 4,566 –<br />
Michael Thomas 338,219 35,000 – 4,254 – –<br />
Mark Allison 84,023 12,582 – – 26,946 875,326<br />
Total 3,728,558 226,185 – 137,133 211,385 1,000,326<br />
Notes: <br />
The terms 'director' and 'officer' have been treated as mutually exclusive for the purposes of this disclosure.<br />
(a) The short-term incentive (STI) component of remuneration in <strong>2004</strong> relates to performance incentives that would have been paid in the current<br />
financial year. Cash and long-term incentive payments are granted annually, after the end of the year. The grant date is tied to the performance<br />
appraisal, which, for the prior year, was completed after 30 September 2003. The specific service and performance criteria are set out earlier in this<br />
report. During this reporting period, no incentives were paid to executives. The STI program was suspended in relation to the 2003 financial year<br />
in recognition of the very tough operating conditions encountered during that period. An accrual has been made in the financial statements, based<br />
on an estimate of the incentives to be paid in respect of the year ended 30 September <strong>2004</strong>. The actual incentives to be paid have not been<br />
determined at the date of this report, but are estimated to be in the order of $1.8 million. These incentives will be disclosed as remuneration in the<br />
2005 financial report.<br />
(b) The fair value of the performance rights is calculated at the date of grant using a Black–Scholes model and allocated to each reporting period<br />
evenly over the period from grant date to vesting date. The value disclosed above is the portion of the fair value of all the performance rights that<br />
have been granted.<br />
The following factors and assumptions were used in determining the fair value of performance rights on grant date:<br />
Fair value per Exercise Price of shares Estimated Risk free Dividend<br />
Grant date Expiry date performance right price (i) on grant date volatility interest rate yield<br />
1 October 2001 1 October 2005 $2.61 $1.00 $3.39 14% 5.5% 6.5%<br />
1 October 2002 1 October 2006 $2.59 $1.00 $3.47 14% 5.3% 7.2%<br />
1 October 2003 1 October 2007 $3.01 $1.00 $3.90 13% 5.3% 6.4%<br />
(i) The total consideration payable on the exercise of any performance rights on a particular day will be one dollar in total (irrespective of the number<br />
of rights exercised on that day).<br />
Estimated volatility approximates historic volatility. The estimated life of all performance rights granted is four years. The value of performance<br />
rights at grant date are therefore amortised over four years. Based on the formula inputs, the percentages used to determine the number of rights<br />
from 2001, 2002 and 2003 to vest were 64%, 54% and 0% respectively. Each performance right entitles the holder to purchase one ordinary B class<br />
share in the company.<br />
Performance rights do not vest until three years after grant date and thereafter exercise is conditional on the consolidated entity achieving certain<br />
performance hurdles. The performance rights are issued at no cost and become exercisable depending on the performance of the company (based on<br />
total shareholder return) relative to the performance of the S&P/ASX200.<br />
The expiry date disclosed is one year after vesting date, given that while the performance rights expire 10 years after the grant date, the expected<br />
expiry of the performance rights is at this time.<br />
Directors are not entitled to participate in performance rights plans.<br />
Further details of performance rights granted are set out under “Performance rights granted to senior executives” below.<br />
(c) “Other” emoluments in the case of executives, includes motor vehicles, housing benefits and other allowances subject to fringe benefits tax.<br />
(d) A termination payment was made to the former Managing Director of Landmark, Mark Allison (resigned 27 November 2003). A retention<br />
payment was made to Mr Maher following the acquisition of Landmark.<br />
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