INSTRUCTIONS - Realview

DIRECTORS’ REPORTFor the year ended 30 June 2009Remuneration report cont.In periodic consultation with independent remunerationconsultants, the Company has structured an executiveremuneration framework that is market competitive andconsistent with the remuneration strategy of the organisation.The objective of the Company’s senior executive remunerationframework is to ensure that reward for performance iscompetitive and appropriate by aligning senior executiveremuneration with achievement of operating and strategicobjectives and the creation of value for shareholders. TheBoard policy is that senior executive remuneration satisfiesthe following key criteria for good remunerationgovernance practices:• reasonableness and competitiveness;• alignment with shareholders’ interests;• performance linkage/alignment of executivecompensation; and• transparency.Alignment to shareholders’ interests is structured through:• recognising the achievement of performancetargets relating to relative total shareholder returnperformance; and• attracting and retaining high calibre senior executives.Alignment to senior executives’ interests is structured through:• ensuring that remuneration is competitive in orderto attract and retain talent;• recognising capability and experience;• recognising performance;• recognising contribution to growth in shareholderwealth; and• providing a clear structure for earning remuneration.The framework provides a mix of fixed and variableremuneration, and a blend of short and long term incentives.(ii) Non-Executive Directors’ feesNon-Executive Directors’ fees are determined within anaggregate Directors’ fee pool limit, which is set and variedonly by approval of a resolution of shareholders at theannual general meeting. The fee pool limit from whichNon-Executive Directors’ fees can be drawn is currently$750,000 per annum in aggregate (approved by shareholdersin November 2005).Fees paid to Non-Executive Directors are set at levels whichreflect both the responsibilities of, and the time commitmentsrequired from, each Non-Executive Director to dischargehis or her duties. Non-Executive Directors’ fees are reviewedannually by the Board, guided periodically by the advice ofindependent remuneration consultants to ensure fees areappropriate for the duties performed and in line with themarket. In order to maintain their independence andimpartiality, the fees paid to Non-Executive Directorsare not linked to the performance of the Company.Superannuation contributions, in accordance withlegislation, are included as part of each director’s totalremuneration. Directors may elect to increase the proportionof their remuneration taken as superannuation subjectto legislative requirements.For the 2009 financial year, with the exception of theChairman, Non-Executive Director fees comprised fees of$80,000 plus an allowance for chairing a Board Committeeof $15,000, plus a fee for serving as a (non-Chair) memberof a Board Committee of $7,500. The Chairman receiveda fixed fee of $190,000 as well as benefits in the formof a car park, mobile telephone allowance and otheradministrative benefits.The Chairman’s fee is determined independently based oncomparative roles and responsibilities in the external marketfor companies comparable with St Barbara Limited. TheChairman is not present at any discussions relating to thedetermination of his own remuneration.Non-Executive Directors, including the Chairman, haveresolved not to increase Non-Executive Director fees forthe 2010 fiscal year.Since 1 October 2005 Non-Executive Directors have beenable to elect to receive all or part of their remuneration(with a 20% minimum) in St Barbara Limited shares,which are acquired on market pursuant to a Non-ExecutiveDirector Share Plan. The plan has been suspended for the2009 fiscal year.(iii) Retirement allowances for DirectorsNon-Executive Directors are not entitled to retirement benefits.(iv) Senior executive remunerationSenior executive remuneration comprises both a fixedcomponent and an at risk component, which is intendedto remunerate senior executives for increasing shareholdervalue, achieving financial targets and effective executionof business strategies. It is also designed to attract andretain high calibre executives. The remuneration of seniorexecutives has three components:• fixed remuneration, comprising base salary (which iscalculated on a total cost basis and includes any fringebenefits tax charges related to employee benefits),employer statutory contributions to superannuationand other defined benefits;• short term incentives; and• long term incentives.The aggregate of the three components comprises a seniorexecutive’s total remuneration.32