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 Group’s Employee Performance Rights Plan. The issue of performance rights is designed to reward key employees for performance and align their performance with the Group 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 Group’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 Group is reasonable in the circumstances. The STI for the 2024/25 financial year included four KPIs relating to safety, completion of drilling programs, the overall financial health of the company, and increase in shareholder value. The award of an STI based on these KPIs was at the Board’s discretion, with the ‘base’ award for meeting all KPIs being 100% of base salary. 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. Based on the KPIs, the Board determined that no STI was payable for the 2024/25 financial year. As part of the terms and conditions of employment, the Group 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. 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 2022. There has been no change in fees since this time. Fees for the Chairman are $95,000 p.a. and fees for other Non-executive Directors $60,000 p.a. 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. Directors’ Report continued 30 Sunstone Metals Limited Annual Report 2025
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