Urbanise.com Annual Report 2019

Overview of executive remuneration The Board policy for determining the nature and amount of key management personnel remuneration is agreed by the Board of Directors after review, approval and recommendation by the Remuneration and Nomination Committee. The Board or the Remuneration and Nomination Committee may engage external consultants to provide independent advice where it considers it appropriate to ensure that the Group attracts and retains talented and motivated directors and employees who can enhance Group performance through their contributions and leadership. During the year ended 30 June 2019 neither the Board nor the Committee engaged any external consultants. Compensation levels and structures for key management of the Group are competitively set to attract and retain appropriately qualified and experienced people, and to reward the achievement of strategic objectives and achieve the broader outcome of protecting and enhancing shareholder value. The compensation structure is designed to account for the capability and experience of key management and the ability of key management to control areas of their respective responsibilities. The principles used to determine the nature and amount of remuneration are as follows: Alignment to shareholder interests: (i) Level of achieved net profit and key operational criteria; (ii) Controllable financial drivers of the businesses including revenues, cash, earnings per share, and capital management; (iii) Business and operational drivers of the business including sales, market growth, expense management; and (iv)Remuneration is set at a level to attract and retain high calibre executives. Alignment to the key management interests: (i) Appropriate rewards for capability and experience; (ii) Clear policies for earning rewards; and (iii) Recognition for contribution. The framework provides a mix of fixed pay and variable at risk incentives and a blend of short and long-term incentives. In relation to long-term incentives, as executive’s contribution and term with Urbanise increase they can be rewarded by gaining exposure to growth in the value of the Group through access to the Employee Share Option Plan. Remuneration and Nomination Committee The Board has established a Remuneration and Nomination Committee which provides recommendations to the Board on remuneration and incentive policies and practices. The Committee provides specific recommendations on remuneration packages and other terms of employment for Executive Directors, Executives and Non-Executive Directors. The Remuneration and Nomination Committee assesses the appropriateness of the nature and amount of remuneration of Directors and Senior Executives on a periodic basis by reference to relevant employment market conditions with an overall objective of the retention of a high-quality Board and Executive team. Non-Executive Director remuneration The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain Directors of the appropriate calibre. The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a General Meeting. The amount of aggregate remuneration and the way it is apportioned amongst Directors is reviewed annually. The Board can access independent advice and industry benchmarks on fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process. During the year no independent advice was obtained, however reference was made to public information. The Board consider their composition to be appropriate for the needs of the Group in its current operating environment. Executive remuneration arrangements For executives, the Group provides a remuneration package that incorporates both cash-based remuneration and share based remuneration. The contracts for service between the Group and executives are on a continuing basis, the terms of which are not expected to change in the immediate future. Share-based remuneration is conditional upon continuing employment thereby aligning executive and shareholder interests. Directors’ Report 23