Remuneration Report (Audited) (continued) The overall level of executive reward takes into account the performance of the Group. The Group is involved in mineral exploration and does not generate any revenue from product sales and therefore growth in earnings is not considered relevant. Shareholder wealth is dependent upon exploration success and has fluctuated accordingly. 2023 2022 2021 2020 2019 2018 Impact on shareholder wealth Gain/(Loss) per share (cents) (0.1) (0.1) 0.1 0.3 (1.9) (0.2) Share price (cents) 2.6 4.5 1.5 0.7 4.1 3.8 The Company’s performance rights plan links employees’ remuneration to the share price of the Company as the performance conditions include ASX trading price hurdles. Executive pay The executive pay and reward framework has two components: – Fixed remuneration (base salary, superannuation & other non-monetary benefits) – Variable remuneration (long-term incentives through participation in the performance rights plan and shortterm incentives through cash bonuses) The combination of these components comprises the executive’s total remuneration. Fixed Remuneration – Base salary Base salary is structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial benefits. Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for senior executives is reviewed annually to assess if the executive’s pay is competitive with the market. There are no guaranteed base pay increases included in any senior executives’ contracts. – Non-monetary benefits Executives may receive benefits including car allowances, car parking and reasonable entertainment expenses. – Post-employment benefits Executives are permitted to nominate a superannuation fund of their choice to receive contributions. – Long-term benefits Long-term benefits include long service leave entitlements. 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 options and 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 2022/23 year includes four KPIs, each one equating to a cash bonus of 25% of base salary if achieved. 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 and provide a framework for delivering long-term value. Directors’ Report continued 22 Sunstone Metals Limited Annual Report 2023
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