Page 29 - Sun Resources Annual Report 2013

Remuneration Report (audited)
Voting and comments made at the
Company’s 2012 Annual General Meeting
Sun Resources NL received more than 98% of ‘yes’ votes
on its remuneration report for 2012 financial year. The
Company did not receive any specific feedback at the
AGM or throughout the year on its remuneration practices.
This report details the nature and amount of remuneration
for each Director of Sun Resources and specified
executives (key management personnel) involved in the
management of the Company who were not Directors.
The remuneration report is set out under the following
main headings:
A Principles used to determine the nature and amount of
remuneration (audited)
B Details of remuneration (audited)
C Service agreements (audited)
D Share-based compensation (audited)
E Additional information (audited)
A Principles used to determine the nature
and amount of remuneration (audited)
The performance of Sun Resources depends upon the
quality of its Directors, executives and staff. To achieve
its financial and operating activities, the Company must
attract, motivate and retain highly skilled Directors and
executives.
The Company embodies the following principles in its
remuneration framework:
- Provide competitive awards to attract high
calibre executives;
- Structure remuneration at a level and mix
commensurate with their position and
responsibilities within the Company so as to
reward executives for Company and individual
performance;
- Align executive incentive rewards with the
creation of value for shareholders.
Executive Remuneration Policy
The policy is for executives to be remunerated on
terms that are competitive with those offered by
entities of a similar size within the same industry.
Packages are reviewed annually by the remuneration
committee with any recommendation of this committee
reviewed and approved by the Board.
Remuneration consultants are not used by the
Company.
As predominately an exploration entity, performance
outcomes are uncertain, notwithstanding endeavour.
As such, remuneration packages are not linked to profit
performance. Present policy is to reward successful
performance via incentive options that are priced on
market conditions at the time of issue. The number of
options granted is at the full discretion of the Board.
The options are not issued in relation to past
performance, but are considered to promote continuity
of employment and provide additional incentive to key
management personnel to increase shareholder wealth.
Sun Resource’s security trading policy provides
acceptable transactions in dealing with the Company’s
securities, including shares and options. The full policy
can be read on the Company’s website.
The executive Directors receive a superannuation
guarantee contribution required by the government,
which is 9%. Some individuals, however, have chosen
to sacrifice part of their salary to increase payments
towards superannuation.
All remuneration paid to Directors and executives is
valued at the cost to the Company and expensed.
Shares given to Directors and executives are valued as
the difference between the market price of those shares
and the amount paid by the Director or executive.
Options are valued using the Black-Scholes model.
Non-Executive Remuneration Policy
The Board policy is to remunerate non-executive
Directors at market rates for time, commitment
and responsibilities. The remuneration committee
determines payments to the Non-Executive Directors
and reviews their remuneration annually, based
on market practice, duties and accountability.
Independent external advice is sought when required.
Fees for Non-Executive Directors are not linked to the
performance of the consolidated entity. However, to
align Directors’ interests with shareholder interests,
the Directors are encouraged to hold shares in
the company. The maximum aggregate amount of
fees (inclusive of the 9% superannuation guarantee
contribution required by government) that can be paid
to Directors is currently $400,000.
Key Management Personnel
The Board’s policy for determining the nature and
amount of compensation of key management for the
Group is as follows:
The compensation structure for key management
personnel is based on a number of factors, including
length of service, particular experience of the individual
concerned, and overall performance of the Company.
The contracts for service between the Company and
key management personnel are on a continuing basis.
Upon retirement, key management personnel are paid
employee benefit entitlements accrued to the date of
retirement.
The remuneration committee recommends the
proportion of fixed and variable compensation (if
applicable) for each key management personnel which
is approved by the Board.
DIRECTORS’ REPORT 27