md performance, page-7

A review of the meo annual directors reports and statutory accounts yields the following:

Executive remuneration arrangements
2008
Competitive rewards are set to attract high calibre executives
Executive rewards are linked to shareholder value
A significant portion of executive remuneration is dependent upon meeting pre-determined performance benchmarks; and
Appropriate performance hurdles are established in relation to variable executive remuneration.

2009 & 2010
Reward executives for individual performance against targets set by reference to appropriate benchmarks
Align the interests of executives with those of shareholders
Link reward with the strategic goals and performance of the Company; and
Ensure total remuneration is competitive by market standards.

2011
Offer competitive remuneration benchmarked against the external market to attract high calibre executives
Where appropriate, provide executive rewards linked to shareholder value; and
Encourage non-executive directors to hold shares in the Company through a Share Savings Plan.

2012 & 2013
Ensure total remuneration is competitive by market standards
Reward executive for exceptional individual performance; and
Align interests of executive with those of shareholders.

What is Jürgen Hendrich actually being paid?
FY08/09 Salary A$375k + super + A$250k sign on payment (May 2008)
FY09/10 Salary A$400k + super
FY10/11 Salary A$420k + super + A$150k STI
FY11/12 Salary A$454k + super (= A$495k incl super) + A$125k STI
FY12/13 Salary A$468k + super (= A$510k incl super)
FY13/14 Salary A$468k + super (= A$510k incl super)
Source: meo annual directors report and statutory accounts

Jürgen Hendrich’s annual base salary has increased +24.8% over the same period as shareholder returns have declined -80.7%.
Additionally, during his tenure as CEO/MD Jürgen Hendrich has been paid A$275k in STI.

There is a substantial disconnect between Mr Hendrich’s actual performance as CEO/MD and his actual remuneration versus the company’s stated remuneration intent of executive rewards being linked to exceptional individual performance, shareholder value and alignment of executive interests with those of shareholders. How does the board account for these disconnects?