Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Directors' report continued
for the year ended 30 June 2020
REMUNERATION REPORT (AUDITED) CONTINUED
PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
CONTINUED
The Board assesses the appropriateness of the nature and amount of remuneration of such officers on a periodic basis by reference
to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit. Such officers are
given the opportunity to receive their base remuneration in a variety of forms including cash and fringe benefits. It is intended that
the manner of payments chosen will be optimal for the recipient without creating undue cost for Armour. Further details on the
remuneration of Directors and Executives are set out in this Remuneration Report.
The chairman's fees are determined independently to the fees of other 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.
If a Non-Executive director performs extra services, which in the opinion of the directors are outside the scope of the ordinary
duties of the director, Armour may remunerate that director by payment of a fixed sum determined by the directors in addition to
or instead of the remuneration referred to above. However, no payment can be made if the effect would be to exceed the maximum
aggregate amount payable to non-executive directors. A non-executive director is entitled to be paid travelling and other expenses
properly incurred by them in attending director's or general meetings of Armour or otherwise in connection with the business of
Armour.
Armour aims to reward the Executives with a level and mix of remuneration commensurate with their position and responsibilities
within Armour. The Board's policy is to align Director and Executive objectives with shareholder and business objectives by
providing a fixed remuneration component.
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The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it should
seek to enhance shareholders' interests by:
link reward with the strategic goals and performance of Armour.
focusing on sustained growth in shareholder wealth and achievement of these strategic goals; and
ensuring total remuneration is competitive by market standards.
Additionally, the reward framework should seek to enhance executives' interests by:
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
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Non-executive Directors' Remuneration
The board seeks to set aggregate remuneration at a level which provides Armour with the ability to attract and retain directors of
the highest calibre, whilst incurring a cost which is acceptable to shareholders. Armour's specific policy for determining the nature
and amount of remuneration of non-executive directors is as outlined below.
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The Company's constitution and ASX listing rules require the aggregate non-executive directors' remuneration be determined
periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 9 November 2011
where the shareholders approved a maximum annual aggregate remuneration of $500,000.
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Remuneration Committee. The Remuneration Committee may, from time to time,
receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate
and in line with the market.
All directors have the opportunity to qualify for participation in the Employee Share Option Plan, subject to the approval of
shareholders.
The rights, responsibilities and remuneration terms for each non-executive director are set out in a letter of appointment, pursuant
to which:
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Directors are granted the rights to access Group information, and the right to seek independent professional advice
Directors are provided with a Deed of Access and Indemnity
Directors are provided with coverage under Armour's directors and officers insurance policy
Directors are made aware of Armour's Corporate Governance policies and procedures
Directors are ordinarily entitled to remuneration of $50,000 per annum, plus reasonable expenses for travel and
accommodation, however, as of May 2020 there was a 20% reduction to lower Corporate costs
There are no fixed terms or notice periods, with the exception of the Chairman
The remuneration of non-executive directors for the year ended 30 June 2020 is detailed on page 32 of this remuneration report.
Executive remuneration
Armour aims to reward executives based on their position and responsibility, with a level and mix of remuneration which has both
fixed and variable components and is commensurate with their position and responsibilities within Armour and to:
link reward with the strategic goals and performance of Armour
align the interests of the executives with those of shareholders
ensure total remuneration is competitive by market standards
The remuneration of the executives is recommended by the Remuneration Committee and determined by the Board. The
remuneration will comprise a fixed remuneration component and also may include offering specific short and long-term incentives,
in the form of:
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base pay and non-monetary benefits
short-term performance incentives
share-based payments
other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration. The remuneration of executive directors and other KMP for
the year ended 30 June 2020 is detailed on page 32 of this Remuneration report.
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