Remuneration repor t (cont’d) Further Education 3.  Remuneration Snapshot Hedging of Unvested Securities Remuneration Mix 3.1 Non-Executive Directors 3.2 Managing Director and Key Management Personnel 2.5 Services from Consultants page 34 During the year the focus on enhancing shareholder value in  all facets of the business identified opportunities within the  organisation’s human capital. Existing processes were refined  to identify candidates in leadership positions whose skills  and experience could be enhanced through further specific  education. Courses offered by leading institutions both  domestically and internationally including Columbia Business  School and London Business School were assessed to match  the development needs of individual staff. The success of this  ongoing program is reflected in the increase in the depth  of talent within the organisation’s leadership group and the  value which the individuals have placed on the Company’s  commitment to their personal development. In November 2011, the Remuneration Committee engaged  Ernst & Young Human Capital (EYHC) as remuneration  consultant to the Committee to provide market data and  benchmarking information to assist the Committee in  reviewing remuneration of KMP. Recommendations for the  amount of remuneration to KMP were not provided. In addition to the market and benchmarking data research,  EYHC provided data in relation to the structure of long-term  incentive plans for Executive KMP to the Company during the  year. The following is designed to provide a summary of IOOF’s  remuneration policies and structure and provide an overview  of the actual value of the remuneration received by Non- Executive Directors, the Managing Director and KMP in 2011-12.  Comprehensive detail on these matters is contained in Section 4. The fees paid to Non-Executive Directors fall within a limit  of $980,000 approved by shareholders at the 2010 Annual  General Meeting. There has been no increase in the approved  limit since this time. Details on the fees paid to Non-Executive Directors in 2011-12  are shown on page 39. Non-Executive Directors’ fees remain unchanged in the two  years immediately following the global financial crisis i.e. in  2008-09 and 2009-10. Since that time they have been adjusted  in line with inflationary movements. The Group Securities and Insider Trading Policy contains a  restriction on executives and other employees entering into a  hedging transaction to remove the ‘at risk’ aspect of securities  that have been granted to them as part of their remuneration  package and which have not vested subject to performance  conditions and/or which are still subject to forfeiture  conditions. Employees are provided with a copy of this policy  and are required to provide annual certification that they have  complied with the policy. Failure to comply with the policy  could result in disciplinary action, including forfeiture of the  securities, suspension or termination of employment. The table below shows the executive TFR and target  performance base remuneration as a proportion of total  remuneration: The Board elected to increase Non-Executive Director fees by  3% for the 2012-13 financial year. The remuneration of the Managing Director and Executive  KMP is designed to ensure strong alignment between the  medium and long term interests of shareholders and the  executive team. To achieve this, the remuneration packages of  Executive KMP are structured into three components: Total Fixed Remuneration:  This is the only ‘guaranteed’ part  of the remuneration package. The amount of the Total fixed  remuneration pay is reviewed annually by the Remuneration  Committee having regard to market movements in the  financial services industry and the relativities of an individual’s  responsibilities at IOOF, along with their performance,  qualifications and experience. The Board seeks and considers advice from independent,  external remuneration consultants where appropriate.  Remuneration consultants are engaged directly by and report  to the Remuneration Committee. In selecting remuneration consultants, the Remuneration  Committee takes into account potential conflicts of interest  and their terms of engagement, regulate their access to, and  require, their independence from IOOF’s management. The  advice and recommendations of external consultants are  used as a guide, but do not serve as a substitute for thorough  consideration of the issues by each Director. Position TFR STI LTI % % % Managing Director 40 32  28  Chief Investment Officer 41  41  18  Other Executives 50  20  30 