AGL Energy Limited Annual Report 2011 59 Long-Term Incentive Restraint 8. Non-executive Directors Approval of Director’s Report AGL has obtained shareholder approval to issue the maximum  number of Share Performance Rights available to Mr Fraser in  respect of each of the financial years ending 30 June 2009,  30 June 2010 and 30 June 2011. The CEO’s LTI allocation was 100% of his TFR in accordance with  contractual rights within the shareholder approved maximum  allocation number of Share Performance Rights. The Share Performance Rights granted to Mr Fraser under the LTI  Plan will vest, subject to meeting the associated performance  hurdles, at no cost to Mr Fraser. Mr Fraser must not, for a period of six months following  termination of his appointment: Non-executive Directors do not receive performance- related payments. Non-executive Directors receive a base fee. In addition, in  recognition of the higher workloads and extra responsibilities of  participating in a Board Committee, if applicable they also receive a  Committee fee. Chairing a Committee attracts a higher fee rate,  but the Chairman of the Board receives no extra remuneration for  participating in or chairing Committees. The maximum aggregate remuneration payable to non-executive  Directors is $2.0 million a year or such other amount as approved  at a general meeting of shareholders. Non-executive Directors’ fees are determined by the Board based  on advice from independent remuneration advisers, which includes  market comparison of remuneration paid to non-executive  Directors in a comparator group of similar sized companies as well  as the ASX100. Any changes to non-executive Directors’ fees take effect from  1 January in the following year. The market peer group used as a comparator group for the  non-executive Directors is made up of companies who have  a market capitalisation ranging from 20 companies below, to  20 companies above, the market capitalisation of AGL. As the focus of the Board is the governance of and long-term  strategic direction of AGL, there is no direct link between non- executive Director remuneration and AGL’s short-term results. This Directors’ Report is made in accordance with a resolution of  the Board of Directors and is signed for and on behalf of the Board  this 25th day of August 2011: Notes: 1. EPS is calculated on the Underlying Profi t. 2. Dividends per share (DPS) relate to financial years, not when they were paid. The following table shows AGL’s annual performance over the last  fi v e y e a r s . Non-executive Directors are permitted to vary the components of  their fee entitlements at any time. No options have been granted to non-executive Directors over any  securities or interests of AGL or the consolidated entity. The Board conducted a review of its own performance, the  performance of individual Directors, and the performance of the  Board Committees during the last year. The fee structure for non-executive Directors, effective  1 January 2011, is as follows: Non-executive Directors may choose to receive fees as a  combination of one or more of: > Directed superannuation contributions.  Subject to minimum  contributions as required under SGC legislation, and maximum  tax deductible contributions under the Income Tax Assessment  Act, non-executive Directors may direct that some or all of their  fees be paid as contributions to a complying superannuation fund  of their choice. > AGL shares acquired under the AGL Share Purchase Plan.  The  Plan Trustee acquires AGL shares on-market at market price  during permitted trading periods. Details of the trading periods  are included in the AGL Securities Dealing Policy which is  available on AGL’s website. > Cash.  The balance of fee entitlements is paid in cash to the  non-executive director in equal monthly amounts over the year. > be engaged or concerned in any capacity whatsoever, in any  business which is similar to, or competitive with, AGL’s business; > solicit or entice, or attempt to solicit or entice, any Director,  employee or client of AGL to leave AGL; or > attempt to persuade any Director, employee or client of AGL  with whom Mr Fraser had dealings with in the year preceding the  termination of his appointment to discontinue their relationship  with AGL or reduce the amount of business they do with AGL. Jeremy Maycock Chairman Base fee $ Audit and Risk  Management  Committee  fees $ Other  Committee  fees $ Chairman of Board 400,000 – – Chairman of Committee 160,000 48,000 32,000 Director 160,000 24,000 16,000 Year ended 30 June 2007 2008 2009 2010 2011 EPS in cents 1 75.5 78.3 85.0 95.6 94.4 DPS in cents 2 35.5 53.0 54.0 59.0 60.0 Increase/(decrease) in  share price (%) n/a (5.7) (5.9) 9.3 (0.3) Five year fi nancial performance