Annual Report 2005 - Pioneer Resources Limited

PIONEER NICKEL LIMITED AND ITS CONTROLLED ENTITYPioneer Nickel LimitedDirectors’ ReportDIRECTORS’ MEETINGSThe number of meetings of the Company’s Directors held in the periodeach Director held office during the financial year and the number ofmeetings attended by each Director were:Board ofShort NoticeDirectors’ Meetings MeetingsDirector Held Attended Held AttendedR N Gillard (NOTE A) 4 4 1 1C L Readhead (NOTE B) 10 10 6 6D J Crook 14 14 7 7I J Buchhorn 14 12 7 7A Trench 14 13 7 7P Langworthy (NOTE C) 9 8 4 4NOTE A - Mr R N Gillard was appointed a Director on 17 March 2005.NOTE B - Mr C L Readhead resigned as a Director on 17 March 2005.NOTE C - Mr P Langworthy was appointed a Director on 29 November 2004.During the financial year there were fourteen general Directors’meetings for which formal notice of meeting was given. In addition,there were seven Directors’ meetings called for specific purposes.REMUNERATION REPORTRecommendation 9.2 of the ASX Corporate Governance Council’sPrinciples of Good Corporate Governance and Best PracticeRecommendations states that the Board should establish aRemuneration Committee. The Board has formed the view that giventhe number of Directors on the Board, this function could be performedjust as effectively with full Board participation. Accordingly it wasresolved that there would be no separate Board sub-committee forremuneration purposes.This report details the amount and nature of remuneration of eachDirector of the Company. Other than Directors, there were no executiveofficers of the Company during the year.Overview of Remuneration PolicyThe Board of Directors is responsible for determining and reviewingcompensation arrangements for the Directors and the executive team.The broad remuneration policy is to ensure that remuneration properlyreflects the relevant person’s duties and responsibilities, and that theremuneration is competitive in attracting, retaining and motivatingpeople of the highest quality. The Board believes that the best way toachieve this objective is to provide the Managing Director and theexecutive team with a remuneration package consisting of a fixed andvariable component that together reflects the person’s responsibilities,duties and personal performance. An equity based remunerationarrangement for the Board and the executive team is in place. Theremuneration policy is to provide a fixed remuneration component anda specific equity related component. The Board believes that thisremuneration policy is appropriate given the stage of development ofthe Company and the activities which it undertakes and is appropriatein aligning Director objectives with shareholder and businessesobjectives.The remuneration policy in regard to setting the terms and conditionsfor the Managing Director has been developed by the Board taking intoaccount market conditions and comparable salary levels for companiesof a similar size and operating in similar sectors.Directors receive a superannuation guarantee contribution required bythe government, which is currently 9% per annum and do not receiveany other retirement benefit. Some individuals, however, have chosento sacrifice part of their salary to increase payments towardssuperannuation.All remuneration paid to Directors is valued at cost to the Company andexpensed. Options are valued using the Black-Scholes methodology. Inaccordance with current accounting policy the value of these options isnot expensed.Non-Executive DirectorsThe Board policy is to remunerate Non-Executive Directors at marketrates for comparable companies for time, commitment andresponsibilities. The Board determines payments to the Non-ExecutiveDirectors and reviews their remuneration annually, based on marketpractice, duties and accountability. Independent external advice issought when required. The maximum aggregate amount of fees thatcan be paid to Non-Executive Directors is subject to approval byshareholders at a General Meeting. The annual aggregate amount ofremuneration paid to Non-Executive Directors was approved byshareholders on 25 September 2003 and is not to exceed $200,000 perannum. Actual remuneration paid to the Company’s Non-ExecutiveDirectors is disclosed below. Remuneration fees for Non-ExecutiveDirectors are not linked to the performance of the consolidated entity.However, to align Directors’ interests with shareholder interests, theDirectors are encouraged to hold shares in the Company and have inlimited circumstances received options.Managing Director and Senior ManagementThe remuneration of the Managing Director is dictated by his executiveservice agreement.The Company aims to reward executives with a level of remunerationcommensurate with their position and responsibilities within theCompany so as to:• Reward executives for Company and individual performance againsttargets set by reference to appropriate benchmarks;• Reward executives with the strategic goals and performance of theCompany; and• Ensure that total remuneration is competitive by market standards.StructureRemuneration consists of the following key elements:• Fixed remuneration;• Fixed remuneration levels dictated by benchmark criteria; and• Issuance of unlisted optionsFixed RemunerationFixed remuneration consists of base remuneration (which is calculatedon a total cost basis including any employee benefits eg. motorvehicles) as well as employer contributions to superannuation funds.Pioneer Nickel Annual Report 200530