IOOF  | Annual Report 2012 The financial services industry consists of companies operating  in a similar regulatory environment to IOOF and is considered  the appropriate market for comparison as this is the key source  of talent for IOOF. Short Term Incentive (STI):  The STI provides an annual  opportunity for individual incentive rewards. The STI reward is  assessed against both Group and individual objectives. Long Term Incentive (LTI):  The LTI provides an annual  opportunity for an equity award that aligns a significant  portion of overall remuneration to shareholder value over the  medium to longer term. For the purposes of this report, the executive KMP (excluding  the Managing Director) are as follows: Remuneration report disclosures include Executive KMP with  key responsibility for the strategic direction and management  of the Company and of the revenue generating businesses or  who have the capacity to significantly affect the Company’s  financial standing. The remuneration of Mr Kelaher is set by the Board and  is based on a market review of the level of remuneration  required to attract and retain a high calibre individual suitable  for the role. During the financial year ended 30 June 2012,  Mr Kelaher received a remuneration package comprising  total fixed remuneration of $1,090,000. This amount included  $65,000 annual Director’s fees paid directly by DKN Financial  Group Limited prior to acquisition by the Group which has  been incorporated into Mr Kelaher’s remuneration from the  Group. Mr Kelaher was entitled to a total STI opportunity  of up to a maximum of $870,000 based on achievement of  superior performance against set targets determined by the  Remuneration Committee. In July 2012 the Remuneration  Committee assessed Mr Kelaher’s performance against those  targets and determined an STI amount of $626,400, being 72%  of the eligible amount. In terms of his remuneration arrangements, the STI  opportunity was settled two thirds by cash and a third in  the form of deferred shares. The number of deferred shares  granted to Mr Kelaher was determined on the basis of the STI  deferral amount divided by the five day Volume Weighted  Average Price up to and including 29 June 2012, which  was $5.8038. The number of deferred shares to be issued  accordingly is 35,977 (capped at 75,000 annually) and there is  no consideration payable for the grant of the deferred shares. The Board has determined that the portion of STI that will be  deferred will be subject to Board ‘look back’ arrangements.  This means the Board will conduct a review of Group  performance in June 2013 and assess whether any significant  unexpected or unintended consequences have occurred  that were not foreseen by the Remuneration Committee  when it made its decision in July 2012, and whether it is still  appropriate to award the deferred shares. During June 2012, the Remuneration Committee performed  a ‘look back’ review in regards to the 31,694 deferred shares  issued in July 2011. The Remuneration Committee determined  that all of the deferred shares were to vest in accordance with  the terms of the arrangement. The 31,694 shares have since  been transferred to Mr Kelaher. The LTI arrangements in place for Mr Kelaher are disclosed  further in Section 6 of the report. The remuneration of other seniors executives is determined by  the Managing Director and is approved by the Board. During the financial year ended 30 June 2012, Mr Abley  received a remuneration package comprising total fixed  remuneration of $319,300. Mr Abley was entitled to a total  STI opportunity of up to a maximum of $127,720 based on  achievement of superior performance against set targets. Due  to Mr Abley’s extended leave of absence during the year, Mr  Abley was not awarded an STI for 2012. During the financial year ended 30 June 2012, Mr Carter  received a remuneration package comprising total fixed  remuneration of $330,000. Mr Carter was entitled to a total  STI opportunity of up to a maximum of $132,000 based on  achievement of superior performance against set targets.  In August 2012 the Managing Director assessed Mr Carter’s  performance against those targets and determined an STI  amount of $65,000. Mr Carter Mr Abley 3.4 Other Executive KMP Remuneration 3.3 Managing Director Remuneration Name Position Executive KMP Mr Stuart Abley Head of Consultum Financial Services Mr Michael Carter Chief Executive Officer - Bridges  Financial Services Mr David Coulter Chief Financial Officer  Mr Stephen Merlicek Chief Investment Officer Mr Renato Mota General Manager Distribution Mr Gary Riordan Group General Counsel & General  Manager Trustee Services Mr Mark Stephen Chief Executive Officer - Lonsdale page 35