Performance Linked Compensation. Performance linked compensation includes both short-term and long-term incentives designed to reward key management personnel for growth in shareholder wealth. The short-term incentive (“STI”) is an “at risk” bonus provided in the form of cash, while the long-term incentive plan (“LTI”) is used to reward performance by granting options over ordinary shares of the Company. Short-term incentive bonus The Group has introduced short-term incentives to some of the executive team that are dependent upon the achievement of performance targets as determined by the Board. These targets include a combination of key strategic, financial and personal performance measures which may have a major influence over company performance in the short-term. Short-term incentives may also be utilised to retain, motivate or reward an executive. The short-term incentive cash bonus applicable to Xx Xxxxxxx, the Chief Geoscientist, set at $25,000 by the Remuneration Committee, was granted on the achievement of discovering and proving the hypothesis on the Wallal Graben. Short-term incentives awarded in the current year were accrued as compensation and fully vested to key management personnel during the period. The short-term incentive for Xx Xxxxxxx is to be paid in the following year. Long-term incentive bonus The Oilex Ltd Employee Performance Rights Plan (“the Plan”) lapsed in the previous financial year, pending a revision of the Plan. Options issued to senior executives after 26 November 2012 are issued under the Australian Securities Exchange Rule 7.1. The issue of options is designed to allow the Group to attract and retain talented employees. The issue of options aims to closely align the interests of senior executives and employees with those of shareholders and create a link between increasing shareholder value and employee reward. The issue of unlisted options and the vesting dates are at the discretion of the Board following recommendations received from the Remuneration Committee. The exercise price of the unlisted options is set at a premium to the share price at the time they are granted. The change in share price is the key performance criteria for achieving a benefit for the options issued as the value that may be generated on exercise of options is dependent upon an increase in the share price above the exercise price of the options. Remuneration packages are not linked to profit performance as the Company is an exploration and appraisal company that is not generati...
