Home' Slater and Gordon Annual Report : Slater and Gordon AR 2016 Contents Directors’ Report
Slater and Gordon Limited
Audited Remuneration Report
I am pleased to present our Remuneration Report for the year ended 30 June 2016.
The 2016 financial year has been a year of great challenge in light of the events faced by Slater and Gordon Limited
(“SGH”), the impact this has had on the financial and operating performance of the group, and the effect that this has had
on our shareholders over the year.
Over recent years the Board has reviewed the remuneration strategy for the executive key management personnel
(“KMP”) to align remuneration and reward with performance. The review in 2015 was undertaken using a comparator
group of companies of similar market capitalisation at that time. There is now significant variance between the
comparator group and the current market capitalisation of SGH. The Board will continue to monitor the relativity of the
Company’s remuneration strategy with the market, company performance, the need to retain key executives, and
alignment of reward.
The review took into account the typical market approach to rewarding senior executives, but also recognised the unique
challenges facing SGH in the short to medium term. Notwithstanding these issues, it is important that we continue to be
able to attract and retain key personnel with the necessary skills and experience to drive the company forward.
The following sets out the key decisions and outcomes that occurred during FY16 as a result of the application of the
remuneration policy previously established by the Board:
• During 2015, the Board fees were reviewed. The review used a comparator group of companies of a similar market
capitalisation to SGH at that time. Subsequently, fees for the Chair and Non-Executive Directors were adjusted from
1 July 2015. In addition, the increase in the Annual Fee Pool was approved by shareholders at the AGM in November
2015. The Board will continue to monitor the fee structure taking into account comparisons to market and the
workload of board members during this period of significant change for SGH (section 3.2).
• Two of the current executive KMP received a STI payment for FY16. These were for specific performance outcomes
which the Board determined supported these payments (section 4.4 .1). The majority of executive KMP did not
receive any STI payment for FY16.
• Consistent with the remuneration policy detailed in the FY15 Remuneration Report, the Board approved and made
offers of Performance Rights to executive KMP. However, due to the changing circumstances for SGH, these
performance rights were not granted and the allocation was cancelled (section 4.4.2).
• The Group Chief Financial Officer (“GCFO”) commenced employment with SGH on 30 November 2015. He has been
a key contributor to the successful negotiation of the Syndicated Facility Agreement, and will be central to the
management of SGH’s financial performance over future years. Therefore, the Board determined that it is in the
interest of shareholders and SGH that it offer the GCFO a revised reward structure focused on his retention with the
business and the alignment of his remuneration with SGH performance (section 4.5).
• In line with developing practice in corporate governance, in June 2016 the Board approved the introduction of a
clawback policy. This policy will apply from FY17 and applies to executive KMP. The policy enables SGH to clawback
certain elements of an executive's remuneration if there has been a misstatement of SGH’s financial statements
which results in the executive receiving a reward which exceeds the outcome that would have been achieved had the
misstatement not been made (section 4.7 .1)
• Two executive KMP, being the Chief Executive Officer UK and the Group Chief Operating Officer received
remuneration increases effective from 1 July 2015 in recognition of their expanded roles (section 4.9.1).
Taking into consideration the performance of the Company over FY16, the Board considers that the remuneration
framework has resulted in outcomes that are in line with its purpose, in particular, in relation to at risk remuneration.
Existing remuneration polices will be reviewed in FY17 to ensure that the remuneration policies continue to support the
achievement of improved performance.
For a more fulsome analysis of these matters, please see the enclosed Remuneration Report.
Chair, Remuneration Committee
Slater and Gordon Limited 29
Annual Report 2016
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