Lead Manager

SECTION 4
BOARD, MANAGEMENT AND CORPORATE GOVERNANCE
• Evaluating the performance of all members of the Board, reviewing and approving the remuneration of
Directors and selecting and appointing new Directors to the Board
4.6 NON-EXECUTIVE DIRECTOR REMUNERATION
Non-Executive Directors are paid an annual fee for their service on the Board and all Committees of the Board
within the maximum aggregate sum for such Directors approved from time to time by Shareholders.The current
maximum aggregate sum is $1.5 million per annum, which is intended to provide the Board with scope to appoint
new Directors in the future. It is not intended to distribute this full amount by way of fees in the current year.
4.7 EXECUTIVE RETENTION AND REMUNERATION
4.7.1 Remuneration approach
Remuneration practices have been structured to be competitive and to ensure that the Group can attract and
retain the talent needed to achieve both short and long term success, while maintaining a strong focus on
teamwork, individual performance and the interests of Shareholders.
Total remuneration will be delivered through base salary, an annual performance bonus and, for Executives,
through the equity incentive plan and Employee Trusts (see further below). Group and individual performance
will be the key drivers of total remuneration. Consequently, for more senior Executives, base salary will continue
to be positioned to provide a small proportion of their total remuneration opportunity.The combination of
annual performance bonus and equity incentives will deliver the majority of these Executives potential total
remuneration opportunity.
4.7.2 Annual bonus pool
The Remuneration Committee of the Board will be responsible for setting the framework of measures for
determining the annual bonus pool each year.
The Group’s financial performance will be the key determinant for the annual bonus pool.The Remuneration
Committee will also consider the market and business environment and other factors deemed relevant. Key
determinants of financial performance will include:
• Return on net equity
• Profit before bonus and tax
In addition, the Remuneration Committee will consider the annual bonus pool impact on the level of Total
Annual Remuneration (i.e. total fixed remuneration plus total annual bonus pool including the present value of
Bonus Deferral Rights (see Section 4.7.5 for details)), with a guideline that Total Annual Remuneration should be
approximately 50% of total Net Revenues and will not exceed 55%.
Total Annual Remuneration would only materially exceed 55% of total Net Revenues at very low levels of Net
Revenue and therefore profit due to fixed remuneration and any need to provide for a minimum level of bonus
to reward and retain particular key Executives who have performed and are key to the future value of the Group.
Bonuses will be paid during the first quarter following the end of the relevant year at or about the time of the
release of the annual financial results.
4.7.3 Ringfenced Assets and Fees
Historically, Babcock & Brown has agreed with certain Executives that certain percentages of the Net Revenue
from the proceeds of realisation of identified assets (Ringfenced Assets) and fees from identified transactions
(Ringfenced Fees) would be allocated to those Executives as part of their remuneration.
In the case of Ringfenced Assets, an estimate of the liability has been created in the accounts of Babcock &
Brown. In contrast, Ringfenced Fees are not booked in the accounts until received at which time a liability equal
to the relevant percentage payable to the Executive is created.
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Liabilities to Executives in respect of Ringfenced Assets and Ringfenced Fees have been included in the Forecasts
as part of the forecast bonus pool. Notwithstanding that additional liability, the amount of the annual bonus pool
will not (except in the circumstances referred to below) be increased to meet any such additional liabilities.