FAIRFAX MEDIA  LIMITED  2013  29 REMUNERATION REPORT OUR REACTION TO CHANGES IN OUR MARKET REMUNERATION IN THE 2013 FINANCIAL YEAR  REMUNERATION2014ANDBEYOND Dear Shareholder  On behalf of the Board, I am pleased to present Fairfax Media’s 2013 Remuneration Report.  Fairfax Media has not stood still in another challenging year for the media business. We have confronted the fundamental  changes in the media market and developed a strategy that we believe will deliver a lean and agile Fairfax Media in a highly  competitive market. We are implementing our transformation strategy.  Through this transition, Fairfax Media has moved its organisational focus from print to digital and has profitable cash positive  newspapers. The 2013 financial year has been a time of real progress on the critical milestones to achieving the business  transformation we have previously announced. We have: We have advised the market that traditional print advertising revenue continues to decline. The transition from a traditional print  media company to a cross-platform business is not instantaneous.  We are confident that we are on a path that will lead us to maximise the opportunities available to a company with our brands,  reputation and people. We believe this will generate competitive returns for our shareholders over the medium to long term.  But we acknowledge that short term returns to shareholders have suffered through this transition. This development has been reflected in 2013 remuneration and in a comprehensive review of incentive arrangements for  2014 and beyond. In the 2013 financial year, a year of challenges and of change: This report provides details of our remuneration practices and the incentive plans in place in the 2013 financial year. We also  want to share with you what we plan to do for the 2014 financial year and beyond.  The Board has gone back to the drawing board to design a ‘fit for purpose’ remuneration plan that is better reflective of the  journey we are asking our shareholders to go on with us in this period of consolidation and transformation followed by the  emergence of a new Fairfax Media. The plan recognises that: •  the majority of senior executive salaries were frozen as were fees paid to Non-Executive Directors. The Chairman also fulfilled  his commitment made at the last AGM and agreed to a reduction in his fees from $432,730 per annum to $396,760; •  there will be no annual bonuses paid to senior executives for 2013, unless there was a pre existing contractual payment  commitment; and  •  the long term incentives, granted previously and tested at the end of the performance period this year, did not vest. •  begun new revenue generation initiatives across our business including a focus on leveraging our mastheads and powerful  brands in the growing business of events.  •  begun a comprehensive product review to do those things that we do well and profitably and not do those things that are  not efficient or that are not part of our core business; and •  reduced our cost structure significantly; reflected in the $251 million in savings we have previously announced, plus an  additional $60 million in savings including the restructure of Australian Publishing Media; •  formed the Digital Ventures unit to maximise the full potential of our digital transaction businesses such as Stayz and RSVP  and to grow new digital opportunities; •  established Domain as a standalone operation recognising the significance of the real estate sector and Domain’s strong  position in this sector; •  launched the compact editions of the weekday Sydney Morning Herald and The Age, so as to enable printing plant  rationalisation; •  consolidated our core Australian publishing businesses into a single unit, Australian Publishing Media, which is removing  duplication from our business and driving revenue;