Directors’ Report 50 Introduction Remuneration Policy Remuneration Governance Voting and comments made at  the Company’s 2012 AGM Concern Action or Comment Remuneration Consultants This Remuneration Report forms part of the  Directors’ Report. It outlines the Remuneration  Policy and framework applied by the Company  as well as details of the remuneration paid to  Key Management Personnel. Key Management  Personnel are defined as those persons having  the authority and responsibility for planning,  directing and controlling the activities of the  Company, directly or indirectly, including  Directors and members of the Executive  Management group. The information provided in this report has been  prepared in accordance with s300A and audited  as required by section 308 (3c) of the  Corporations Act 2001 . The objective of the Company’s remuneration  philosophy is to ensure that Directors and senior  staff are remunerated fairly and responsibly at a  level that is competitive, reasonable and appro- priate, in order to attract and retain suitably  skilled and experienced people. During the year the Company introduced a STI  Plan that is based on Key Management Personnel  individual performance measures and a Long- Term Incentive (“LTI”) Executive Rights Plan that  provides performance-based remuneration to  members of management through the issue of  Deferred Rights and Performance Rights vesting  over a period of three years. These new plans are  discussed in further detail later in this report.  The table below provides a summary of the  Board’s action and / or comments in response to  concerns raised by shareholders at the 2012  AGM in relation to remuneration. Key issues raised were: The Remuneration Policy has been designed to  align the interests of shareholders, Directors,  and employees. This is achieved by setting a  framework to: In consultation with external remuneration  consultants, the Group has structured an execu- tive remuneration framework that is market  competitive and complimentary to the business  strategy of the organisation. The framework is intended to provide a mix of  fixed and variable remuneration, with a blend of  short and long-term incentives as appropriate.  As executives gain seniority within the Group,  the balance of this mix shifts to a higher propor- tion of “at risk” rewards (refer to chart –  Remuneration Reward Mix on the following  page). The Company has benchmarked the issuing of LTIs to the Managing Director and other Key Management  Personnel against all companies of comparable market position as part of a broader remuneration  comparison using AON Hewitt / McDonald, a review of survey data from the Egan and Associates “The KMP  Report” and validation from Godfrey’s Remuneration Group. The findings confirm the level of remuneration,  inclusive of performance rights, to be comparable to similarly experienced Managing Directors and other Key  Management Personnel with companies of comparable market positioning within the industry. The Company has sought to discuss key elements contained in the Remuneration Report with shareholders,  shareholder representative groups and proxy advisory groups. Further details regarding the TSR Alpha™  benchmarking methodology are included in the LTI section of this Report. Deferred rights for the Managing Director were transitional with eligibility for performance rights only in the  future. Details of the STI and LTI Plans are provided later in this Report. The Remuneration Committee is a committee of the Board and has responsibility for setting  policy for determining the nature and amount of emoluments of Board members and senior  executives. The Committee makes recommenda- tions to the Board concerning: In forming its recommendations the Committee  takes into consideration the Group’s stage of  development, remuneration in the industry and  performance. The Corporate Governance  Statement provides further information on the role of this committee. The Group engages the services of independent  and specialist remuneration consultants from  time to time. Under the  Corporations Act 2001 ,  remuneration consultants must be engaged by  the Non-Executive Directors and reporting of  any remuneration recommendations must be  made directly to the Remuneration Committee. Role of the Remuneration Committee 〉 help ensure an applicable balance of fixed  and at-risk remuneration, with the at-risk  component linking incentive and perfor- mance measures to both Group and indi- vidual performance; 〉 provide an appropriate reward for Directors  and Executive Management to manage and  lead the business successfully and to drive  strong, long-term growth in line with the  Company’s strategy and business objectives; 〉 encourage executives to strive for superior  performance; 〉 facilitate transparency and fairness in execu- tive remuneration policy and practices; 〉 be competitive and cost effective in the  current employment market; and 〉 contribute to appropriate attraction and  retention strategies for Directors and  executives. 〉 Non-Executive Director fees; 〉 remuneration levels of Executive Directors  and other Key Management Personnel; 〉 the executive remuneration framework and  operation of the incentive plan; and 〉 key performance indicators and performance  hurdles for the executive team. 〉 t he granting of deferred rights; 〉 definition of what compromises ‘fixed pay’; and 〉 a lack of understanding of the TSR Alpha™ concept  recommended as the LTI performance assessment  process. www.kingsgate.com.au