|The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.|
This Principle emphasises the importance of an appropriate remuneration structure, policy and practice that supports the sustained performance and value creation of the company in accordance with its strategic objectives.
Remuneration levels should be sufficient, but not excessive, to compensate directors for their stewardship, and Key Management Personnel (KMP) for their management of the company. This Principle and its Provisions take into account contemporary concerns about pay – in particular, the growing perception of excessive levels of senior executive compensation – whilst recognising that remuneration is a key factor in attracting, retaining and motivating the right talent.
The Provisions describe:
- The remuneration of Executive Directors (EDs) and KMP, and the linkage to performance (Provision 7.1).
- The remuneration of Non-Executive Directors (NEDs) and that it reflects their contribution (Provision 7.2).
- The appropriate level of remuneration to attract, retain and motivate directors and KMP (Provision 7.3).
A significant and appropriate proportion of executive directors’ and key management personnel's remuneration should be structured so as to link rewards to corporate and individual performance.
The remuneration of non-executive directors is appropriate to the level of contribution, taking into account factors such as effort, time spent and responsibilities.
Remuneration is appropriate to attract, retain and motivate the directors to provide good stewardship of the company and key management personnel to successfully manage the company for the long term.