Context

It had been three years since a Directorial remuneration review and concerns existed as to the market relevance of existing Directorial remuneration profiles.

Intervention

The process involved comparing the Chairman, Deputy Chairman and Non Executive Director remuneration to three levels of data, commencing with broad and ending with specific. Data included the Corporate Remuneration Advisors (CRA) Top 500 (All Industries) and the CRA Top 500 (Mining & Metals) sector across a range of benchmark factors that approximate the operating and performance dimensions of the business. These included market capitalisation, number of employees, total revenue and operating profit after tax. In general terms the strongest indicator of remuneration is normally revenue size of organisation

Executive Officer remuneration was also compared to a peer sample of companies, once again focussing on those who approximated the operating dimensions of the business. Data was gathered from the peer company annual reports and where the executive officer was not engaged for the full year, remuneration was annualised and a 100 % strike rate was assumed regarding meeting attendance. This enabled a per meeting remuneration outcome to be created for the roles under review. Once the base line comparisons were established a longitudinal comparison was conducted where the roles were also compared to data from 03, 04 and 05 financial years. This gave an indication as to the trend movement over time.

The Directors also were curious as to how the Mining & Metals sector compared to other sectors in the Australian workplace in terms of available remuneration so the executive officer roles were also compared to a range of industry sectors using the CRA Top 500 Report as the data source.

Outcome

High quality data was sourced, collated and represented in a format which facilitated objective decision making regarding market relevant Directorial remuneration.