Remuneration report (Audited) (continued) Variable Remuneration – Long Term Incentive (Employee Performance Rights Plan) At the discretion of the Board, employees can be invited to participate in the Company’s Employee Performance Rights Plan. The issue of performance rights is designed to reward key employees for performance and align their performance with the Company growth and strategic objectives. Any performance rights issued to Directors are subject to shareholder approval. The Board feels that the expiry date, exercise price and, where applicable, vesting performance conditions of options and performance rights issued to executives is appropriate to align the goals of the executives with those of the shareholders to maximise shareholder wealth. – Short Term Incentive (Cash bonuses) The Board reviews the Company’s Short Term Incentive (STI) program annually and sets the Key Performance Indicators (KPIs) required to be achieved to receive any STI payment. The total potential STI available to individual executives is set at a level so as to provide sufficient incentive to executives to achieve their targets while ensuring that the cost to the Company is reasonable in the circumstances. The STI for the 2021/22 year includes four KPIs, each one equating to a cash bonus of 25% of base salary if achieved (2021: 5 KPIs equal to 20% each). At the Board’s discretion a payment under the STI may be increased to a maximum of double in recognition of exceptional performance, therefore the maximum potential STI payment is 200% of base salary. The measures were chosen as they represent the key drivers for the short-term success of the business, strategic initiatives around the growth of the Company, and provide a framework for delivering long-term value for shareholders. A cash bonus of 20% of base salary was paid to the Managing Director and the three other Key Management Personnel during the financial year ended 30 June 2022, relating to the achievement of a KPI connected to monetising the shares held in Copperstone Resources AB for a value higher than the Volume Weighted Average Price of Copperstone shares from the closing of the transaction to sell the Viscaria Project to Copperstone. No other cash bonuses have been paid during the year ended 30 June 2022 (2021: 20%). As part of the terms and conditions of employment, the Company prohibits executives from entering into arrangements to protect the value of unvested long term incentive awards. This includes entering into contracts to hedge their exposure to options or shares granted as part of their remuneration package. Entering into such arrangements has been prohibited by law since 1 July 2011. Non-executive Directors Fees and payments to non-executive Directors are structured to reflect the demands which are made on, and the responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board. The Chairman’s fees are determined independently to the fees of non-executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to the determination of his own remuneration. Directors’ fees The base remuneration was reviewed and increased by the Board from 1 July 2021. Fees for the Chairman are $90,000 p.a. and fees for other Non-executive Directors $55,000 p.a. (last increased 2018 to $85,000 and $50,000 respectively). Directors’ remuneration is inclusive of committee fees. Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. The total maximum currently stands at $300,000. Retirement allowances for Directors Directors are permitted to nominate a superannuation fund of their choice to receive superannuation contributions. 21 Sunstone Metals Limited Annual Report 2022 SUNSTONE METALS LIMITED ANNUAL REPORT 2022
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