Remuneration report
This report outlines the remuneration arrangements for Directors and Executives
of the Wattyl Group.
The information provided in this report includes disclosures that are required
under Accounting Standard AASB124 Related Party
Disclosures. These disclosures have been transferred from the financial report
and have been audited. Additional disclosures required by
the Corporations Regulations which have not been audited are marked unaudited
in the following report.
Organisation and remuneration committee
The Company’s Board of Directors has an established Organisation and
Remuneration (O&R) Committee. The Committee’s main role is to
assist the Board in fulfilling its corporate governance responsibilities and
to review and make recommendations on the following matters:
•
Managing Director performance assessment and succession planning;
•
A remuneration framework and compensation and benefits practices that enable
Wattyl Limited (Wattyl) to attract and retain high
quality executives and directors who are dedicated to the interests of Wattyl’s
shareholders;
•
The reward for the Managing Director, and those who report to the Managing
Director (together, “Senior Executives”), taking into account
shareholders’ interests, Wattyl’s business performance, the performance
of the relevant executive and to employment market conditions
within the industry;
•
Reviewing the Remuneration Report;
•
Non Executive performance review process and fees.
In addition, the O&R Committee reviews Human Resources strategy and policies
for consistency with the business strategy.
The Committee comprises two non-executive directors (one of whom is the Chair)
and the Managing Director. The members are Patty
Akopiantz (Chair of the Committee), John Ingram (Chairman of the Board) and
the Managing Director of Wattyl, John Nolan. Diane Grady the
previous Chairman of the Committee, was a member until October 27, 2006. Attendance
at Committee meetings by its members are set out
on page 26 of the Annual Report.
Remuneration philosophy
The objective of the company’s executive remuneration framework is to
be able to attract, retain and motivate highly skilled executives, and
ensure reward for performance is competitive and appropriate given the results
delivered. In particular, the framework aligns executive
reward with achievement of strategic objectives, the creation of value for
shareholders and competitive market practice for delivery of reward.
The Board and the O&R Committee ensure that the remuneration framework embodies the following principles:
•
Provide competitive remuneration arrangements relative to market, to attract,
retain and motivate high calibre executives
•
Link executive rewards to shareholder value
•
Ensure a significant portion of executive remuneration is ‘at risk’ (via
short-term and long-term incentives), measured through
achievement of strategic goals and growth in shareholder value
•
Establish appropriate, challenging performance hurdles for variable executive
remuneration
•
Reward behaviour which is consistent with Wattyl’s values and behaviours
•
Encourage ownership of Wattyl shares
•
Ensure full legal compliance and transparent disclosure of executive remuneration
The Board and the O&R Committee recognise that while remuneration has an
important role in recruiting, retaining and motivating talented
executives, other factors also play a major role e.g. Wattyl’s corporate
reputation, ethical culture and business values, executive leadership
and broader human resources policies.
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