Chief and Senior Executives - Performance Pay - North Queensland ...

Chief and Senior Executives - PerformancePayPolicy 6-2 Version 5Date Approved: 26 June 2012Company Secretary…………………1. ApplicationThis policy applies to Chief and Senior Executives of NQBP.2. PolicyA performance pay scheme will be implemented for executives at the discretion of theBoard.The scheme will apply to NQBP's performance in each financial year. Assessment ofperformance will be made annually. There will be no "sacrifice" of existing salary to enterthe scheme.Process for Senior ExecutivesThe CEO will recommend to the Board, through the relevant Board Committee,arrangements to determine performance pay for senior executives. The scheme willcomply with the government’s expectations in relation to performance paymentarrangements for Government Owned Corporations (GOCs), as reflected in the principlesincluded as Attachment 1.Corporation-wide performance criteria and targets will be set at the beginning of theperiod, including weighting for different criteria, and methods of measurement.Criteria and targets may be drawn from the following areas, but are not limited to these:Financial PerformanceEnvironment/Safety PerformanceCorporate GovernanceCommunity RelationsEffective Management of AssetsActual criteria and targets will be as agreed between the Board and CEO from time totime.In addition, individual performance targets will be agreed between the relevant executiveand the CEO.Chief and Senior Executives Performance Pay Page 1 of 4E12/18430 - Policy Sponsor – CFO

At the end of the period, the CEO will assess Corporation-wide performance against thecriteria and, based on this, a level of performance pay to be recommended for Boardapproval through the relevant Board Committee. In recognition of the collegiate nature ofthe management in achieving Corporation-wide objectives a common percentage acrossscheme participants will be applied for this component. The individual component will bedetermined by the CEO.Process for CEOThe performance pay scheme (if any) will comply with government expectations (seeAttachment 1) and operate consistent with the CEO’s employment agreement.Effect of Leave on Performance PaymentsThe general position is that leave should be taken and scheduled to allow theperformance targets to be achieved. Stated the other way, in any given period normalquantities of leave should be anticipated. Where leave is to be taken for substantially thewhole of the period eg long service or maternity leave, the performance pay scheme willbe suspended for that period for the employee (ie performance payments would be on apro-rata basis).Resignation or TerminationIn the event of the termination of the employment relationship occurring as a result ofaction taken by either an employee or NQBP, no performance payment will be made forthe performance pay period during which employment terminates. [Examples: If anemployee terminates on 1 June; no performance payment will be due for that financialyear. If an employee terminates in July; the employee will be entitled to performance payfor the immediately prior financial year (ending June 30) even though the payment maynot be determined by the Board until August.]SuperannuationNQBP will ensure it meets the minimum superannuation obligations as required by theSuperannuation Guarantee (Administration) Act 1992 while complying with individualsuperannuation fund rules.New EmployeesNew employees will need to have worked at least three months in the relevantperformance pay period and still be employed at the end of the performance pay period toqualify for any performance payment. In addition, a performance payment will notbecome an entitlement until the employee's probationary period ends and the employee isconfirmed as a permanent employee.At the discretion of the CEO, the probationary period may or may not be counted as timewithin the performance pay scheme.The performance payment due is a pro-rata (of recognised time in the scheme comparedto an officer in the scheme for the whole financial year).Employee StatusWhere a scheme participant is not working full time, the performance pay percentage willbe applied to the paid total fixed remuneration (ie not to the full time equivalent salaryrate).Chief and Senior Executives Performance Pay Page 2 of 4E12/18430 - Policy Sponsor – CFO

Notification to Shareholding MinistersNQBP will provide notifications through quarterly reports to shareholding Ministers onpayment of annual performance bonuses including an assessment of corporate andindividual’s performance.3. Policy Review DateThis policy should be reviewed by 30 June 2013.4. DefinitionsNQBP: means North Queensland Bulk Ports Corporation Limited ACN 136 880 128 andits related bodies corporate including Ports Corporation of Queensland Limited ACN 126302 994 (PCQ) and Mackay Ports Limited ACN 131 965 707 (MPL).Contractors: means contractors or consultants engaged by NQBP under a personalservices consultancy agreement or other similar arrangements.Chief and Senior Executives Performance Pay Page 3 of 4E12/18430 - Policy Sponsor – CFO

Attachment 1Relevant principles outlining the expectations of government in relation to performancepayment arrangements for GOCsThe performance payment arrangements will have an organisational rather than individualfocus and align with short, medium and long term goals of NQBP as outlined in the annualStatement of Corporate Intent and five year Corporate Plan. Performance indicatorsincorporated in the performance payment arrangements should focus on operationalissues such as productivity, service delivery and safety and not be directly linked toNQBP’s financial performance. There should also be a clear link to compliance withrelevant government policies and a statement to the effect that chief and seniorexecutives are required to support the Board in meeting its responsibilities toshareholding Ministers.Performance payments are not to exceed 15% of total fixed remuneration. No new orrevised chief and senior executive employment contacts are to contain performancepayments which exceed 15% of total fixed remuneration.Performance payments for GOC chief and senior executives can be approved by theGOC board, so long as each of the individual performance payments do not exceed the15% cap (where appropriate) as outlined in Principle 2 and shareholding Ministers havereviewed the board approved policy underpinning the performance payment system.GOC boards are to provide timely advice to shareholding Ministers in writtencorrespondence within one month of a performance payment being made to a chief orsenior executive. This notification must include the performance payments approved bythe board for GOC chief and senior executives including an assessment of each chief andsenior executive’s individual performance and contribution to corporate performance.GOC boards are also to include this information in the relevant quarterly report.Where a GOC proposes to revise it performance payments policy, the revised policy mustcomply with these principles. GOC boards are to provide a copy of the revised boardapproved policy including a list of differences from the previous policy to shareholdingMinisters for their information. If the revised Board approved policy falls outside of theexpectations as outlined in these principles, GOC Boards will be requested byshareholding Ministers to amend the policy.No new performance payment schemes are to be introduced in GOCs without the priorwritten approval of the shareholding Ministers.Where GOCs enter into new employment agreements with chief and senior executives orrevise existing employment agreements, GOC boards are to provide copies of theexecuted employment agreements to the Office of Government Owned Corporations.Shareholding Ministers approval of performance payments may be reintroduced ifdecisions are made by GOCs that are contrary to government policy. Where a GOC hasrecently made a significant decision that is contrary to government policy they will need todemonstrate a period of compliance with government policy before more liberalarrangements would apply.Chief and Senior Executives Performance Pay Page 4 of 4E12/18430 - Policy Sponsor – CFO