CLOSE FILE X D. EXECUTIVE KMP COMPENSATION  (continued) 4. Variable Compensation — Short Term Incentive (“STI”)  Bonus  (continued) (b) Structure  (continued) The Group has predetermined financial performance benchmarks which  must be met in order to trigger payments under the STI bonus scheme.  These Group specific and tailored performance conditions were chosen so  as to align the STI payments to the financial performance of the Company  and the Group as a whole. These performance criteria include EPS growth  benchmarks and minimum CFROI targets. The CFROI performance component used relates to earnings before  interest, tax, depreciation and amortisation, excluding material items  of income and expense and discontinued operations (“EBITDA”) as  a percentage of capital employed, and capital employed is represented by  total shareholders’ equity plus net debt. Bonuses are calculated based on  the ratio from year to year and are on a sliding scale between 10% and 20%  with nil bonus for a CFROI achieved in any year of less than 10% and capped  at the maximum bonus where CFROI exceeds 20%. The Company considers  that this financial performance condition relating to the Group’s underlying  cash flows is appropriately challenging taking into account the group’s cost  of capital and investment hurdle rates and directly links STI rewards to  those relevant Executive KMP with the financial performance of the  Company and the Group and the flow-on consequences for shareholders. Similarly the Company has chosen EPS as the other suitable STI  performance condition due to the direct linkage to the Group’s underlying  financial performance. Bonuses using the EPS criteria are calculated such  that where the Company’s EPS growth percentage is less than the growth  achieved for the ASX 300 index, nil bonus is payable, and where the  Company’s EPS growth equals or exceeds 10% more than the ASX 300’s  EPS growth for the relevant period (being growth over one or three years,  as appropriate), 100% of that bonus component is payable. The Company  considers that no direct segment, market index or industry comparators  exist for the Company, and thus the ASX 300 comparator has been selected  for benchmarking this performance condition as a proxy for similarly sized  or larger companies listed on ASX operating predominantly in Australia, and  the performance of this benchmark is independently externally verifiable. For the 2013 financial year Mr. Graham Burke as the VRL CEO was eligible  to earn up to $1.0 million in the form of an annual bonus and for the  2014 year this $1.0 million STI bonus was split evenly between Mr. Burke  and Mr. Robert Kirby, the two Executive Director KMP. 50% of the bonus is  based on CFROI and 50% is based on EPS growth relative to the top 300  stocks listed on the ASX. For the year ended 30 June 2014 the CFROI bonus  component amounted to $249,000 each (2013: $500,000 for Mr. Burke only)  and the EPS bonus component amounted to $250,000 each (2013: $482,500  for Mr Burke only) and, being due and payable, have been accrued for at  30 June 2014. The CFROI hurdle rates achieved were at 99.6% of the  maximum hurdle rate for the 2014 financial year (2013: 100%) and the 2014  EPS bonus component for the EPS growth over the past 3 years amounted  to 100% of the maximum hurdle rate (2013: 96.6% over one year). In addition to CFROI and EPS performance criteria, for Executive  Committee KMP individual personalised key performance indicators  (“KPIs”) are also set each year including appropriate financial and  non-financial performance metrics relevant to the role, position and  responsibilities of the individual. The KPIs for the following year are set  for each individual Executive Committee KMP and that individual’s  performance against the previous year’s KPIs is reviewed annually. Only the components of STI bonus payments that can be accurately  determined are accrued at balance date – remaining components of STI  bonus payments, such as those related to personal performance criteria  for Executive Committee KMP, are calculated after balance date and are  paid in the following October. The STI bonus amounts shown in the Remuneration tables for Executive  Committee KMP for the 2014 and 2013 years include both the accrued  CFROI and EPS components for the current year, being due and payable,  as well as their personal performance bonus components paid in relation  to the prior financial year. Accordingly the STI figures for 2014 and 2013 in  the Remuneration tables detailed on pages 19 and 20 of this Report are  a composite of various years’ bonus components and may not be directly  comparable. The overall review of proposed bonus payments to Executive Committee KMP  is decided annually by the Remuneration Committee on the recommendation  of the Executive Director KMP. All bonuses, including any recommended STI  bonus payments for the Executive Director KMP and for Executive Committee  KMP, are approved by the Company’s Remuneration Committee. Future STI bonuses of the Executive KMP are dependent on a number of  external variables, including the EPS of the Company and the financial  performance of the Group. For all Executive KMP the minimum potential  value of the STI which could be paid in respect of any year, for example as  a result of poor performance or missing tailored, pre-set targets, would be  nil, and the maximum STI bonus payable in respect of any year would be the  maximum amounts, as detailed in the table below for the current year.  Therefore, the theoretical percentage of maximum STI bonus payments  that could be forfeited in respect of any year would be 100% of the  maximum amounts, as detailed in the table below for the current year. In  addition, transaction based specific bonuses may be payable to one or more  Executive KMP where specific medium term strategic challenges are  encountered and successfully overcome. The STI bonus arrangements for the Executive KMP for the year ended  30 June 2014 are set out as follows: *  Previously nil for 2013 $^{#}$  Previously $1,000,000 maximum The STI bonus payments made to each of the Executive Director KMP and  the Executive Committee KMP in the periods ending 30 June 2014 and  30 June 2013 and the relative percentage of such STI incentive  remuneration to total remuneration are detailed on pages 19 and 20 of this  Report. The objective of the Company’s various LTI plans is to reward Executive  KMP in a manner which assists in aligning this element of their  remuneration with the creation of shareholder wealth. During the 2014 and 2013 years there have been 3 LTI plans in operation  within the consolidated entity: 23 ANNUAL REPORT 2014 – The Company’s Executive Share Plan and Loan Facility (“ESP”),  introduced in 1996; – The 2008 Option Plan over ordinary shares to Mr. Graham Burke, the  Company’s CEO (“2008 OP”); and – The 2012 Option Plan over ordinary shares to Mr. Graham Burke, the  Company’s CEO and from 29 November 2013, Co-Executive Chairman  and Co-Chief Executive Officer (“2012 OP”). 5. Variable Remuneration — Long Term Incentive (“LTI”) (a) Objective Name Title Maximum  STI Methodology Robert G.  Kirby Co- Executive  Chairman  and  Co-Chief  Executive  Officer $500,000 * 50% based on CFROI, 50%  based on increase in EPS  compared to ASX 300  performance Graham  W. Burke Co- Executive  Chairman  and  Co-Chief  Executive  Officer $500,000  # 50% based on CFROI, 50%  based on increase in EPS  compared to ASX 300  performance Julie E.  Raffe Finance  Director 100% of  base salary 50% based on individual  KPIs, 25% based on CFROI,  25% based on increase in  EPS compared to ASX 300  performance Simon T.  Phillipson General  Counsel 100% of  base salary 50% based on individual  KPIs, 25% based on CFROI,  25% based on increase in  EPS compared to ASX 300  performance Clark J.  Kirby Chief  Operating  Officer 100% of  base salary 50% based on individual  KPIs, 25% based on CFROI,  25% based on increase in  EPS compared to ASX 300  performance David  Kindlen Chief  Information  Officer $200,000 50% based on individual  KPIs, 25% based on CFROI,  25% based on increase in  EPS compared to ASX 300  performance