TPI
16/01/2015 10:40
OFFICE
NOT PRICE SENSITIVE
REL: 1040 HRS Transpacific Industries Group Ltd
OFFICE: TPI: TPI Amends CEO employment contract
16 January 2015
FOR RELEASE TO MARKET
Transpacific amends CEO employment contract
Transpacific Industries Group Ltd (ASX:TPI) Chairman, Martin Hudson, today
announced that Transpacific has entered into an amended employment contract
with Mr Robert Boucher, Chief Executive Officer. The employment contract,
which was previously a rolling 12 month contract, now provides for a term to
30 June 2018 and includes a number of remuneration incentives linked to
Transpacific achieving its strategic goals.
Commenting on the changes, Mr Hudson said: "The Board considers that
achievement of the four point strategy that Mr Boucher has outlined to
shareholders over the past year is vital to the success of the turnaround of
Transpacific that he is leading and to the creation of sustainable increased
value for our shareholders.
"The strategy to build the foundations for the growth of Transpacific is now
underway and involves growing revenue, maximising productivity, targeting
tuck-in acquisitions and improving landfill capacity and internalisation - a
tangible example of which can be seen in the recent announcement of the
purchase of Melbourne Western Landfill from Boral.
"Bob was also given a clear mandate to fix the balance sheet, reshape the
senior Management Team and start to address our legacy operational issues,
all of which he has done or commenced inside 12 months.
"Since commencing in November 2013, Bob has brought a new energy to
Transpacific. With an unwavering commitment to safety and 25 years of
world-class waste-management experience, Bob's ongoing tenure is key to
completing the turnaround of Transpacific.
"Signing Bob to a contract with a term to 30 June 2018, with specific
financial and strategic targets that align to our strategy, is a reflection
of both the Board's confidence in Bob's ability to succeed in delivering that
strategy and his confidence and commitment to the same outcome. It also
reflects a realistic timeframe within which to measure success." Mr Hudson
concluded.
The new employment arrangements incorporates a blend of both short and long
term financial and strategic performance conditions. A summary of the key
provisions of Mr Boucher's amended employment agreement are set out in
Attachment A.
END
Investor and Media Relations:
Frank Sufferini
Group Investor Relations Manager
Telephone: 0416 241 501
Email: [email protected]
Attachment A - Summary of the Key Provisions of Employment Agreement
This document provides a summary only of the key provisions of the amended
employment contract between Mr Robert Boucher (CEO) and Transpacific
Industries Group Ltd (TPI). TPI and the CEO have entered into an Amendment
Deed to amend the terms of the CEO's Executive Services Agreement dated 13
November 2013 (the terms of which were first announced on 11 October 2013).
Term
The CEO's employment will continue until 30 June 2018, unless terminated
earlier (see termination provisions summarised below).
Remuneration
The remuneration package of the CEO comprises:
o A total fixed remuneration (TFR) package of $1.5 million per annum,
effective 1 July 2014;
o Participation on an annual basis in the TPI's Short Term Incentive plan,
which provides for an at-target bonus of 75% of TFR for achieving specified
annual performance measures set by the Board, increasing to a maximum of 150%
of TFR if stretch targets are met. Bonuses are paid 50% in cash and 50% in
performance rights, with vesting of the performance rights deferred for 2
years.
Participation in a one off Long Term Incentive plan award, involving the
grant of performance rights and cash payments that are subject to a range of
financial performance and strategic performance conditions. The grant of
performance rights is subject to shareholder approval at the 2015 AGM.
Further information on the terms and conditions of the performance rights
will be provided in the Notice of 2015 AGM.
The financial performance conditions involve testing against a Relative Total
Shareholder Return vesting condition and a Return on Invested Capital vesting
condition. These conditions will be measured over a 3 year period to 30 June
2017 for one tranche and over a 4 year period to 30 June 2018 for another
tranche.
The total of the benefits available under this component for performance at
target was determined on an award value of up to $1.2 million in performance
rights, increasing to a maximum of $2.4 million for stretch performance.
The strategic performance conditions measure successful achievement of a
number of strategic milestones over the performance period relating to
landfill, business transformation, earnings, market share and productivity
measures. These strategic performance conditions are considered by TPI at
this time to be commercial-in-confidence, with the result that publication of
their details may be prejudicial to TPI's interests. However, details of
whether these strategic performance conditions have been achieved will be
disclosed at the end of the relevant performance period.
The total of the benefits available under this component for performance at
target constitute up to $1 million in cash paid on achievement of the
strategic milestones, and up to $0.95 million in deferred rights vesting on
the 1st or 2nd anniversary of achievement of the milestones.
o A separate cash bonus pool, payable in annual instalments at the end of
each financial year subject to the CEO meeting the annual target performance
expectations set for the CEO by the Board over each financial year to 30 June
2018, as follows:
o FY15 and FY16 - $750,000 per year;
o FY17 and FY18 - $500,000 per year.
Termination
The CEO may resign at any time by giving 12 months' notice. TPI may
terminate the CEO's employment at any time for cause, and otherwise upon
providing 12 months' notice. If either party terminates by notice after 1
July 2017, the notice period will be reduced to the unexpired balance of the
term to 30 June 2018. When notice is required, TPI can make payment in lieu
of notice of all or part of any notice period (calculated based on the CEO's
TFR only).
End CA:00259813 For:TPI Type:OFFICE Time:2015-01-16 10:40:11
