Directors’ Report 51 Directors’ Report continued The Remuneration Committee engaged the  services of the Godfrey Remuneration Group Pty  Ltd during 2012 to review its remuneration prac- tice revisions and to provide further validation in  respect of both the executive short-term and  long-term incentive plan design and standards.  These recommendations covered the remunera- tion treatment of the Group’s Non-Executive  Directors and Key Management Personnel. Under the terms of the engagement, the  Godfrey Remuneration Group Pty Ltd provided  remuneration recommendations as defined in  section 9B of the  Corporations Act 2001  and was  paid $76,520 in financial year 2012 for these  services. The Company did not pay Godfrey  Remuneration Group Pty Ltd any further fees  this financial year in relation to other services. The Godfrey Remuneration Group Pty Ltd has  confirmed that the above recommendations  have been made free from undue influence by  members of the Group’s Key Management  Personnel. The following arrangements were implemented  by the Remuneration Committee to ensure that  the remuneration recommendations were free  from undue influence: As a consequence, the Board is satisfied that the  recommendations were made free from undue  influence from any members of the Group’s Key  Management Personnel. The executive pay and reward framework is  comprised of three components: The above chart represents the remuneration  reward mix for the various Key Management  Personnel based on achievement of all stretch  targets. Total fixed remuneration (“TFR”) is structured as a total employment cost package, including  base pay and superannuation. Base pay may be  delivered as a mix of cash, statutory and salary  sacrificed superannuation, and prescribed  non-financial benefits, at the executive’s  discretion. Executives are offered a competitive base pay.  Base pay for senior executives is reviewed annu- ally to ensure the executive’s pay is competitive  with the market. An executive’s pay is also  reviewed on promotion.  In addition to using the AON Hewitt / McDonald  Survey (resources industry) Remuneration  Report as an annual benchmarking tool and the  Egan and Associates ‘The KMP Report’; external  remuneration consultants provide analysis and  advice to ensure base pay is set to reflect the  market for a comparable role. The 5th Edition of  Egan and Associates ‘The KMP Report’ (August  2013) shows overall Non-Executive Directors’  remuneration for Kingsgate to be below the  average for ASX 101 – 200 peer group compa- nies. Significantly, average Non-Executive  Directors fee increases of 8.7% for the ASX 101  – 200 and 6.5% for the ASX 201 – 300 groups  over the period compares to no increase in fees  for Kingsgate Non – Executive Directors. The Board annually reviews and determines the  fixed remuneration for the CEO / Managing  Director. The CEO / Managing Director does the  same for his direct reports. The Executive  Management group reviews and recommends  fixed remuneration for other senior manage- ment, for the CEO / Managing Director’s  approval. There are no guaranteed increases to fixed  remuneration incorporated into any senior  executives’ agreements. 〉 The Godfrey Remuneration Group Pty Ltd was  engaged by, and reported directly to, the Chair  of the Remuneration Committee. The agree- ment for the provision of remuneration  consulting services was executed by the Chair  of the Remuneration Committee under dele- gated authority on behalf of the Board; and 〉 Any remuneration recommendations by the  Godfrey Remuneration Group Pty Ltd were  made directly to the Chair of the  Remuneration Committee. 〉 fixed remuneration including  superannuation; 〉 short-term performance incentives; and 〉 long-term incentives through participation in  the Executive Rights Plan. Executive director and key management personnel remuneration Reward Mix Fixed remuneration Total Fixed Remuneration (TFR) Base salary and superannuation MD/CEO Short Term  Incentive (STI) Long Term  Incentive (LTI) COO/CFO Other Direct Reports to MD/CEO 60% 25% 15% 57% 29% 14% 49% 29% 22% Remuneration Reward Mix (based on the achievement of STI / LTI targets)