30
CIMIC Group Limited Annual Report 2016 |
Remuneration Report
FIXED REMUNERATION
Fixed remuneration received by Senior Executives comprises base salary, non-monetary benefits and superannuation (as applicable).
Non-monetary benefits included such items as fringe benefits, expatriate benefits and other salary-sacrificed benefits as agreed from
time to time.
On 1 January 2016, an increase was made to the fixed remuneration for Mr Muriel Bernal from $700,000 to $1,000,000 in recognition of
his promotion to the role of CFO on 23 July 2015.
On 1 November 2016, an increase was made to the fixed remuneration for Mr Valderas from $1,200,000 to $1,500,000 in recognition of
his promotion to the role of CEO on 18 October 2016.
STI
Summary of 2016 STI
Senior Executive
participation
Mr Valderas and Mr Muriel Bernal participated in the 2016 STI. Mr Fernández Verdes did not participate in
the STI.
How much could Senior
Executives earn under
the 2016 Financial Year
STI?
The STI opportunity provides a reward for threshold, target and stretch performance based on performance
conditions referred to below. The table reflects the potential earnings as a percentage of fixed remuneration
for the relevant executive.
The STI opportunities for 2016 for Mr Valderas and Mr Muriel Bernal were:
Percentage of Total Fixed Remuneration (TFR)
Threshold
Target
Stretch
45% (ie, 60% of the target STI
opportunity of 75% of TFR)
75% (ie, 100% of the target STI
opportunity of 75% of TFR)
112.5% (ie, 150% of the target STI
opportunity of 75% of TFR)
Over what period was
performance
measured?
The 2016 Financial Year.
What were the
performance
conditions?
Financial measures
80% of the amount that could be earned as STI was
based on performance against financial measures and
targets applicable to the relevant role.
For Senior Executives in 2016, this financial component
was based on NPAT and operating cash flow.
Non-financial measures
20% of the amount that could be earned as STI
was based on performance against safety targets
and/or non-financial measures relevant to the
role.
Why were those
performance measures
chosen?
The financial measures are designed to encourage
Senior Executives to focus on the key financial
objectives of the Group consistent with the business
plan for the relevant year and the Group’s strategic
objectives.
The non-financial measures are designed to
encourage a direct relationship between the
measures set and the individual Senior
Executive’s role. They also ensure that
contributions to critical initiatives are recognised
and rewarded.
How is the STI paid?
The STI is paid in cash following finalisation of the audited financial statements for the 2016 Financial Year.
How was performance
against targets
assessed?
Performance against financial and non-financial key performance indicators (KPIs) was assessed following
the end of the 2016 Financial Year to determine the actual STI payments. A scorecard-based calculation was
made and, the resulting STI amount adjusted, if required, following a qualitative assessment.
Notwithstanding any STI amount determined, the Remuneration and Nomination Committee, on the
recommendation of the Executive Chairman, retains an overriding ability to adjust the STI amount before
payment taking into account all relevant circumstances.
STI outcomes for the 2016 Financial Year
STI payments for the 2016 Financial Year were determined based on Senior Executive performance against the applicable financial and
non-financial KPIs, as described above. In general, during the 2016 Financial Year, the Group focused on growth opportunities and
strategic acquisitions, most notably Sedgman and UGL.
30
