Page 39 - Icon Energy 2014 Annual Report

REMUNERATION REPORT - AUDITED
The Icon Energy Limited Performance Rights Plan (“Plan”) was presented and approved by shareholders at the Annual
General Meeting held on 22 April 2010, under which the Company is able to grant appropriately structured short and long-term
incentives to employees (including Executive Directors) in addition to their fixed remuneration. The structure of the STI and
LTI plans and achievement of predefined STI and LTI targets is reviewed by the Board, and modified where appropriate, on an
annual basis. In accordance with ASX listing rule 7.2 Exception 9 the Plan is being resubmitted to shareholders for approval at
the 2014 AGM. This is because Listing Rule 7.1 prohibits Icon from issuing or agreeing to issue new securities amounting to
more than 15% of Icon’s Issued Capital during a 12 month period, without shareholder approval unless exception 9 of listing
rule 7.2 applies. Exception 9 excludes securities issued under an employee incentive plan where shareholders have approved
the issue of the securities under the Plan within the previous 3 years. As it has been over 3 years since shareholder approval
was last obtained the Company is seeking a renewal of approval of the Icon Performance Rights Plan by shareholders at the
2014 AGM so that securities issued under the Plan will not be included in the 15% limit referred to above.
4. FIXED REMUNERATION
Fixed remuneration consists of the base remuneration calculated on a total cost basis and including FBT charges on
employee benefits, as well as contributions to superannuation funds. Remuneration levels are reviewed annually. Senior
executives were restricted to CPI increases over the financial year.
5. SHORT-TERM INCENTIVES
During the year the Company issued Short-term Incentive (STI) plan awards under the 2013-14 STI Plan. Set out below
are some of the key features of the Company’s 2013-14 STI Plan.
Table 3: Short Term Incentives
STI is an annual cash (30%) and equity (70%) based incentive awarded at the discretion
of the Board on achievement of specified company and individual performance goals
established on an annual basis between management and their direct reports, which
includes the Group’s financial performance and individual performance.
The STI rewards Company executives and staff for meeting or exceeding corporate and
individual performance goals. The STI aligns the interests of Company executives with
shareholders by incentivising executives to meet Company goals that add value to the
Company and contributes to share price growth.
The STI that can be earned is based on a percentage of the executive’s Fixed
Remuneration (FR) ranging from 50% of FR for the Managing Director to 10% of FR
for employees (refer to table 2 for further details).
Performance conditions are set by the Board and reflect the financial and operational
goals of Icon Energy and individual performance objectives over a 12 month period.
Corporate key performance indicators include a focus on the following areas:
• Exploration success;
• Funding of Icon activities;
• Health, Safety & Environment performance targets;
• Growth in the Company’s market capitalisation;
• Sourcing, evaluation and execution of new opportunities.
Performance Rights issued under the 2013-14 STI were granted with effect from 4
March 2014. Performance Rights were granted at no cost to the participants. The
Performance Period is between 1 July 2013 and 30 June 2014.
Following the conclusion of the Performance Period (30 June 2014) the Board made
an assessment as to the extent to which the STI corporate performance conditions
have been met and the number of Performance Rights that will vest. Financial and
operational performance is assessed against targets set at the start of the year.
The performance of the Managing Director (MD) is assessed by the Board through
the Remuneration, Nomination and Succession Committee and the performance of
individual executives (other than the MD) is reviewed by the Committee based on
the recommendation of the MD following executive performance appraisals.
What is the STI?
How does STI
contribute
to Company
Performance?
What is the value
of STI that can be
earned?
What are the
performance
conditions?
Performance Period,
Grant Date & Issue
Price
How is performance
assessed?
ABN 61 058 454 569 ICON ENERGY LIMITED 2014 Annual Report 39