Page 20 - 2021 NZPM Annual Report

Corporate Governance

COMPOSITION OF THE TOTAL AVAILABLE REMUNERATION For the new financial year, the board considered it
FOR THE EXECUTIVE TEAM (%) appropriate to review the executive incentive scheme and
commissioned PwC to recommend an updated structure
11% 13% that is appropriate for our current and future environment.
Following the advice received from PwC, a new structure of
STI and LTI components was agreed and implemented for the
2021 23% 2020
23% executive team in April 2021.
64%
66% Director remuneration
The total maximum remuneration payable to the directors
of NZPM is approved by the shareholders at the annual
meeting and apportioned by the directors. The current board
remuneration of $495,000 was approved at the Annual
TFR STI LTI Meeting held on 16 August 2019, based on a board comprising
seven directors.
Remuneration policy Following the conclusion of Ngaire Mansfield’s term as an
Our Executive Remuneration Policy is designed to link pay appointed director at the 2020 Annual Meeting, and an
to performance, with the goal of attracting and retaining earlier review of the board including its composition and
talented executives, rewarding individual performance, structure undertaken by Westlake Governance, the directors
sustaining long-term performance, and aligning the in September settled on a total board size of six members,
interests of management with those of our shareholders and comprising one appointed director and five elected directors.
customers. The STI and LTI components provide significant Each of the directors was subsequently appointed to chair a
upside and downside potential depending on actual results, board committee.
as compared to pre-determined goals for success, and the
following graph shows total executive remuneration paid as The remuneration of the board takes into account the scope
a percentage comparable to our operating profit for the last and complexity of the company, and the responsibilities of
5 years. the directors, and is reviewed on an annual basis following
advice from Strategic Pay. In accordance with that advice,
the board has since 2019 paid a board fee to each director
EXECUTIVE REMUNERATION COMPARABLE TO OPERATING
PROFIT * and a committee chair fee to each director chairing one of
the board’s five standing committees, excluding the Conflicts
Committee.

The following graph shows the total director remuneration
paid over the last five years comparable to the approved
directors’ fees pool:

TOTAL DIRECTOR REMUNERATION $
600,000

500,000
400,000
300,000

200,000
100,000

0
2017 2018 2019 2020 2021

Approved Director fees pool Total Director remuneration paid
*Operating profit is Earnings before net financing costs, dividends
and tax.

18 NZPM Group Limited