Page 40 - Icon Energy 2014 Annual Report

REMUNERATION REPORT - AUDITED
6. LONG-TERM INCENTIVES
The only Long-term Incentive (LTI) plan awards issued or in operation during the year were the 2012-13 LTIs and 2013-14
LTIs. Set out below are some of the key features of the Company’s 2013-14 LTI plan.
Special ShortTerm Incentive
During the year the Company completed a capital raising of $18 million at an issue price of 23.5 cents. In recognition of their
roles in securing the placement the Board on the recommendation of the Remuneration Committee approved a special cash
performance bonus of $125,000 to each of the Managing Director and the Chief Financial Officer.
The STI benefits will vest effective 30 June 2014 following the assessment of performance
carried out by the Board after the end of the financial period. In the case of the cash
component the benefit will be paid to employees following the assessment process.Where
the Performance Rights vest, they may be exercised by the executive at any time up to the
‘STI Last Exercise Date’, which is 30 June 2016 for the 2013-14 STI grant. Any unexercised
Performance Rights will lapse following the STI Last Exercise Date.
STI Performance Rights lapse if vesting does not occur on testing of the performance
conditions. Where Performance Rights vest they may be exercised at any time up to
the STI Last Exercise Date being 30 June 2016. Any Performance Rights not exercised
by the STI Last Exercise Date will lapse. The Expiry Date for 2013-14 STI Performance
Rights is 30 June 2016.
When an executive exercises a Performance Right following vesting they will be issued
with one ordinary share for every Performance Right exercised. No exercise price is paid
on vesting as Performance Rights are issued at no cost.
When do the STI
benefits vest?
STI Performance
Right Expiry/Lapse
What happens on
exercise of rights?
Table 4: LongTerm Incentives
Long-term incentives are delivered to executives in the form of equity awards
(Performance Rights) which may vest as Icon shares upon the satisfaction of
performance conditions/key performance drivers which underpin long term sustainable
growth for the Company.
The LTI provides an incentive to Company executives to achieve Company goals that
add value to the Company and contribute to long term shareholder wealth. The LTI
benefits only pass to executives following a sustained increase in the share price and
the level of benefits paid to executives is dependent on the relative performance of
the Company when benchmarked against other listed energy companies incentivising
executives to outperform.
The LTI 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 19% of FR
for senior managers (refer to table 2 for further details)
In order for Performance Rights under the LTI to vest the following two sets of
performance criteria must be met:
(1) The average daily Icon Energy share price must achieve and maintain a level
of at least 45 cents per share for at least 30 consecutive days over the 3 years
commencing 1 July 2013; and
(2) The growth of the Icon Energy share price relative to the share price of a
comparator group of Australian oil and gas exploration and production companies
and other companies appearing in the S&P/ASX 300 Energy list as determined by
the Board (expressed as a percentile ranking) over the 3 years commencing 1 July
2013 must achieve the 40th percentile in order for rights to begin vesting
What is the LTI?
How does LTI
contribute
to Company
Performance?
What is the value
of LTI that can be
earned?
What are the
performance
conditions?
40 ICON ENERGY LIMITED 2014 Annual Report ABN 61 058 454 569