REMUNERATION POLICY MIRVAC GROUP

Transcription

1 REMUNERATION POLICY MIRVAC GROUP Document Control: MG-CSHR-HRP-2.29-B-0512

2 CONTENT 1.1 Purpose Commencement Application of Policy Mirvac s remuneration principles Total Fixed Pay ( TFP ) Annual remuneration review Out-of-cycle remuneration reviews Job Levels Short-term Incentive Plan ( STI Plan ) STI Plan Eligibility Calculation of individual STI awards Form of STI awards Timing of STI awards Board discretion Clawback Policy Defined Terms Variation 9 Document Control: MG-CSHR-HRP-2.29-B

3 REMUNERATION POLICY 1.1 Purpose Mirvac s remuneration strategy is designed to attract, motivate and retain the individuals who have the skills, knowledge and experience required to ensure Mirvac s continued business success. At Mirvac, we believe it is important to have clear guidelines in order to ensure that pay decisions are made in a fair and consistent manner across the company. This Policy sets out the Group Policy for decisions relating to Total Fixed Pay, Short-term Incentives, job levels and clawbacks. 1.2 Commencement This Policy will commence from 1 November It replaces all other remuneration policies. 1.3 Application of Policy This Policy applies to Employees whose remuneration is not linked to an Award or Enterprise Agreement. This Policy does not form part of any Employee s contract of employment and is not intended to give rise to contractual rights against Mirvac. 2.0 Mirvac s remuneration principles Mirvac has six remuneration principles that provide a framework for remuneration decision-making across the organisation. Remuneration at Mirvac should: align and contribute to Mirvac s key strategic business objectives and desired business outcomes; align the interests of Employees with those of security holders; assist in attracting and retaining the Employees required to execute the business strategy; support Mirvac s desired performance-based culture; encompass the concept of pay parity and be fair and equitable; and be simple and easily understood. 3.0 Total Fixed Pay ( TFP ) The purpose of TFP is to act as a base level reward for a competent level of contribution in the role. TFP includes cash, compulsory superannuation and any salary sacrifice items (including fringe-benefits tax). The following factors need to be taken into account when setting TFP levels: the size and complexity of the role; role accountabilities; skills and experience of the individual; market pay levels for comparable roles; and capacity to pay/budgetary constraints. Document Control: MG-CSHR-HRP-2.29-B

4 3.1 Annual remuneration review TFP for eligible Employees is reviewed, but not necessarily adjusted, in July/August each year, with any changes generally enacted in September. The eligibility criteria for a TFP review are as follows: Employee category Permanent Employees hired before 31 March (inclusive) Permanent Employees hired after 31 March Fixed term/temporary Employees On leave without pay Eligibility Eligible to be considered for a TFP increase Not eligible to be considered for a TFP increase Not eligible to be considered for a TFP increase Eligible to be considered for a TFP increase 3.2 Out-of cycle remuneration reviews Adjustments to TFP should not be provided outside the annual review period unless there are exceptional circumstances, or where there has been a clear change to the individual s role. All requests for out of cycle remuneration reviews are required to be submitted to an ELT member for approval. Requests for out of cycle TFP reviews should not be submitted to an ELT member during the period 1 June 30 September. Under no circumstances should Employees be advised of a TFP increase prior to approval being obtained. Second level Manager Approval level HR Business Partner ELT member Out of Cycle Remuneration reviews ELT A report of all out of cycle remuneration reviews will be submitted to ELT on a quarterly basis. 4.0 Job levels Mirvac has implemented the AONHewitt Job level framework in order to ensure there is consistency and fairness when comparing jobs across the organisation. All Mirvac positions outside of ELT are to be assigned a job level (1-7) based on the size and accountabilities of the role. The job level for a role will generally only be reviewed when there is a material change to the size or scope of an existing position, or when a new position is created. It is important to note that job levels are assigned to positions rather than to employees. Document Control: MG-CSHR-HRP-2.29-B

5 5.0 Short Term Incentive Plan ( STI Plan ) The purpose of Mirvac's STI Plan as outlined below is to focus Employees on activities that support Mirvac s strategic drivers and desired culture, and to provide a reward for successful outcomes. 5.1 STI Plan Eligibility Effective from FY14, all permanent employees are eligible to participate in the STI Plan. The following table sets out qualifying conditions to be eligible to be considered for a STI award: Employee category Permanent Employees hired between 1 July and 31 March Permanent Employees hired after 31 March Fixed-term/temporary Employees On leave without pay Qualifying period Employees who leave Mirvac Eligibility criteria Employees are eligible to be considered for a pro-rata STI award if they commence employment between 1 July and 31 March (inclusive) in the performance year. An STI award will be dependent on individual performance in the performance year. Employees will not be eligible for a STI award for the performance year in which they are employed if they commenced employment after 31 March. Not eligible for a STI award. Eligible to be considered for a STI award on a pro-rata basis by reference to the period worked in the performance year. To be eligible for consideration for a STI award an Employee must have completed a minimum of three months' service in the performance year to which the STI payment relates. This means they must have been performing their work duties for a three-month period in the performance year, excluding any periods of paid or unpaid leave. Employees will not be considered for, or eligible to receive, a STI award if their employment ceases for any reason prior to the time the payment of STI is due. 5.2 Calculation of individual STI awards An eligible Employee may receive a STI award, subject to the following: Their individual performance, as assessed by their manager; Mirvac's performance, as assessed by the HRC; Their individual STI target; Mirvac's STI pool; and Divisional performance (where relevant), as assessed by the CEO & Managing Director. Individual STI targets An individual s STI target is the amount that would be allocated for on target individual, Group and potentially Divisional performance, subject to the constraints of Mirvac's STI pool. STI targets are expressed as a percentage of an Employee s TFP. STI awards can range from zero to double the STI target. Document Control: MG-CSHR-HRP-2.29-B

6 The STI target for a particular position will be based on various factors including job level, market practice and Mirvac's assessment of an Employee's potential. Calculation of Mirvac STI score The Mirvac STI score is linked to Mirvac s achievement against a balanced scorecard of measures. The Mirvac STI score can range between 0 and 150%. The measures and associated targets on the Mirvac STI scorecard are approved by the HRC at the commencement of the performance year. At the end of the performance year, the HRC reviews Mirvac s performance against the STI balanced scorecard to determine the final STI pool. In assessing Mirvac s performance, the HRC has an opportunity to exercise discretion to adjust the Mirvac STI score up or down in order to ensure payments are consistent with Mirvac s remuneration strategy, and to prevent any anomalous remuneration outcomes. Calculation of Group STI pool The value of the STI pool is determined by adding the STI targets for all STI participants, and multiplying the result by the Group STI score. The overall STI spend is constrained by the Group's STI pool and may impact on the determination of an Employee's STI award. Earnings base for STI awards In general, an Employee s STI award will be calculated using their TFP immediately prior to the time of the remuneration review in July. There are, however, a number of circumstances where the earnings base used to determine a STI payment may be calculated on a pro-rated basis. These include situations where, during a performance year, an Employee: commenced employment; was on unpaid leave; had an out of cycle change to their TFP; or changed working hours. An Employee s Actual TFP will be used as the basis for calculating any STI award in circumstances where their Actual TFP is less than 90% of their year-end TFP. 5.3 Form of STI awards Non-ELT members For non-elt members, 100% of any STI award will be paid in cash (less applicable taxation) and will include the minimum compulsory superannuation contributions paid by Mirvac for your benefit. ELT members For ELT members: 75% of any STI award will be paid in cash (less applicable taxation) and will include the minimum superannuation contributions required to be made for Mirvac to avoid a superannuation guarantee charge under applicable superannuation legislation; and Document Control: MG-CSHR-HRP-2.29-B

7 the remaining 25% of any STI award will be provided to the Employee through the granting of 'STI Deferred Rights' to acquire fully paid ordinary stapled securities in Mirvac (Stapled Security). The STI Rights will vest, subject to the conditions below, in two tranches: o o 50% will vest on the 1st anniversary of the STI Rights being granted; and the remaining 50% will vest on the 2nd anniversary of the STI Rights being granted. 5.4 Timing of STI awards The cash component of a STI award will be paid in September (following the end of the performance year) on, or around, the regular monthly pay run. Any STI Rights component of a STI award will be granted in September (following the end of the performance year) on or around, the regular monthly pay run. Conversion of STI Rights to Stapled Securities For each Right which vests, within 10 days of vesting, the ELT Member will be allocated one Stapled Security. Vesting of STI Rights and allocation of Stapled Securities is conditional upon: Current Employees No Clawback Events being identified by the Board prior to vesting and allocation Former Employees the former Employee being a Good Leaver; and no Clawback Events being identified by the Board prior to vesting and allocation. In the event of a Clawback Event being identified by the Board, the Board, at its discretion may lapse some, or all, unvested STI rights. Impact of ceasing employment on STI Rights The treatment of any unvested STI Rights and any vested STI Rights for which Stapled Securities have not yet been allocated immediately before an Employee's employment ends will be dealt with depending on an Employee's leaver status as follows: Leaver status Good Leaver Bad Leaver STI Rights treatment STI Rights will be retained by the Employee, with vesting and allocation subject to original vesting/allocation periods and conditions. Any unvested STI Rights will immediately lapse. Any vested STI Rights for which Stapled Securities have not yet been allocated will immediately be forfeited and no Stapled Securities will be allocated. Document Control: MG-CSHR-HRP-2.29-B

8 6.0 Board discretion The Board may at its absolute discretion delegate any of its powers or discretions conferred on it by this policy. Every exercise of a discretion by the Board (or its delegates) and any decision by the Board (or its delegates) made in accordance with this policy shall be final, conclusive and binding. 7.0 Clawback Policy The following table presents the clawback policy at Mirvac effective 13 February Component Employees impacted Clawback events Clawback amount Clawback mechanism Policy ELT members + level 7 employees Limited to material misstatement of financial statements within the preceding three financial years. The amount to be clawed back (if any) is to be determined at the discretion of the HRC having regard to factors such as: The estimated impact of the misstatement on the executive s incentive outcomes; The nature of the involvement of an executive in the misstatement (if applicable); and The factors that contributed to the misstatement. The following remuneration components are able to be clawed back: Deferred STI payments; Unpaid STI awards; and Unvested Long Term Incentive ( LTI ) awards In the event that a clawback event occurs, the HRC will exercise discretion as to which of these components will be used to claw the money back. Document Control: MG-CSHR-HRP-2.29-B

9 8.0 Defined Terms Bad Leaver means an Employee whose employment ends: (a) (b) by resignation (other than Retirement); or by the employer terminating the Employee's employment, other than due to redundancy, agreement for employee to join an investment partner, total & permanent disablement or death. Clawback Event means where there has been a material misstatement of financial statements within the preceding three financial years. Corporations Act means the Corporations Act 2001 (Cth). ELT means Mirvac's Executive Leadership Team. ELT Member means an Employee who is a member of Mirvac's Executive Leadership Team. Employee means an employee of Mirvac or any 'related body corporate', as that term is defined in the Corporations Act. Good Leaver means an Employee whose employment ends due to: (a) retirement; (b) redundancy; (c) agreement with employer to join an investment partner; (d) total & permanent disablement; or (e) death. Group means Mirvac Limited and any 'related body corporate', as that term is defined in the Corporations Act. HRC means Mirvac Board's Human Resources Committee. Mirvac means Mirvac Limited as the context reasonably requires, references to Mirvac may be taken as references to the Group. Non-ELT Member means an Employee who is not a member of Mirvac's Executive Leadership Team. Retirement means the Employee's resignation from their employment in circumstances where Mirvac is satisfied that the Employee no longer intends to work on a full-time or part-time basis (including but not limited to as an employee, consultant or contractor) or is unable to work as a result of their permanent disablement. 9.0 Variations Mirvac reserves the right to vary, replace or terminate this Policy from time to time in its absolute discretion. Document Control: MG-CSHR-HRP-2.29-B