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2018INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIES

Advancing the awareness of and best practice in investor relations

Annual assessment of compensation, roles and skills survey of investor relations practitioners from Australian and New Zealand listed entities conducted by Australasian Investor Relations

This research is strictly confidential and for use by AIRA members only.

Please do not distribute.

OCTOBER 2018

© 2018 Australasian Investor Relations Association. All rights reserved.

2018 INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIESB

CONTENTS

RESEARCH PURPOSE AND APPROACH 22018 SNAPSHOT 3SUMMARY OF KEY FINDINGS 51. Total Remuneration 52. Remuneration and reporting lines 53. Short-term and long-term incentives 54. Reporting responsibilities 55. Key performance indicators 56. Succession, career goals and role satisfaction 57. Current challenges 68 Essential attributes of the role 69. Respondentprofile 6

ABOUT IR COMPENSATION 71. Total annual remuneration (all-in company costs)

excluding bonuses and other incentives 72. Bonus payments (as a percentage of salary) 83. Calculation of short-term incentives 94. Long-term incentives 105. Calculation of long-term incentives 116. Attitudes towards remuneration 12

ABOUT IR ROLES 137. Person to whom IR function directly reports 138. Number of IR staff reporting to IR head 159. Number of non-IR staff reporting to IR head 1510. Titles and salaries of direct reports to IR head 1611. Recruitment practices 1612. Key performance indicators for IR function 1713. Current challenges faced by IR practitioners 1714. Job satisfaction 1715. Succession planning for IR function 1816. Desired career paths 1817. Attributes of effective IR practitioners 18ABOUT IR SKILLS AND EXPERIENCE 1918. Highest level of education completed by IR

practitioners 1919. Experience as an IR practitioner 2020. Role prior to current IR role 2021. ASX / NZX ranking of respondents’ companies 2122. Respondentprofiles 21CONTACT DETAILS 23

ABOUT THE METHODOLOGY AND INTERPRETING RESULTS

The median was used in this study to measure the centre of the data. The mean was not used as a measure of the centre of data because (i) it is affected by unusually high or low data points; and (ii) remuneration and bonus levels were measured in bands.

Remuneration bands were expressed within a band range of A$25,000 and additional cash bonus payments were expressed as a percentage of total annual salary. In past studies remuneration bands were expressed in $50,000 increments.

Respondents were asked to indicate their total remuneration level comprising annualsalaryplussuperannuationandfringebenefitsasthetotalall-incoststo the company, excluding any short-term and long-term incentive payments (such as cash bonus, shares, options or share performance rights).

Listed entities were grouped for analysis based on the latest market capitalisation ranking on the relevant securities exchange (ASX or NZX).

Graphs and tables may not capture the entire respondent pool for each survey question due to rounding, or respondents skipping a particular question or not providing a complete response.

The seniority of respondents, the positioning of investor relations (IR) and marketcapitalisationvariedfromcompanytocompany.Thisinfluenced,amongst other things, responsibilities and remuneration levels. The results herein should be used as a guide only. Ultimately, the employer is best placed to determine individual practitioner responsibilities and remuneration.

The compensation details of respondents are included in section 1 of this report. Section 10 includes the compensation details of IR practitioners and non-IR practitioners reporting to respondents.

Disclaimer: While the Australasian Investor Relations Association endeavours to provide reliable analysis, and believes the material it presents is accurate, it will not be liable for any claim by any party acting on such information.

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1 2018 INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIES © 2018 Australasian Investor Relations Association. All rights reserved.

We’re delighted to collaborate with AIRA on its 12th annual Investor Relations Remuneration & Responsibilities Study.

THE FOLLOWING RESEARCH PROVIDES SOME INTERESTING INSIGHTS INTO REMUNERATION PRACTICES AND TRENDS IN THE INVESTOR RELATIONS INDUSTRY.

The role of IR within listed entities is important in bridging the gap between an entity, its shareholders and the investment community.

Computershare provides:

• research and insights,

• local and global best practice, and

• advocating on our clients’ behalf on issues that matter.

This ensures we provide ongoing support to the listed entities we work with, including the key areas of Investor Relations.

We look forward to further collaborating with AIRA, as the 2018 Research and Insights Partner, in advancing the role of Investor Relations across Australasian listed entities.

2018RESEARCH &INSIGHTSPARTNER

THIS IS THE 12TH ANNUAL INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES STUDY


2 2018 INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIES

RESEARCH PURPOSE AND APPROACH

The Australasian Investor Relations Association (AIRA) conducts this research to provide insights for investor relations (IR) practitioners and their colleagues in publicly listed companies about job scopes, remuneration practices and trends.

THIS INVALUABLE ANNUAL RESEARCH STUDY SHOULD ASSIST YOU IN:• benchmarking remuneration

• identifying factors important to recruiting IR practitioners

• managing IR practitioners and their teams

In July 2018, 225 investor relations practitioners representing all industry sectors and working in ASX 1–200 and NZX 50 listed entities and AIRA members working in ASX 201+ entities were invited to participate in an online questionnaire.

Eighty-five practitioners completed the questionnaire, representing a response rate of 38%.This year’s response rate means readers of this report can beconfidentthefindingsarerepresentativeofthebroaderinvestor relations profession in Australia and New Zealand.

RESPONDENTS DEMOGRAPHIC BY MARKET CAPASX RANKING OF REPONDENTS COMPANIES

2015

2016

2017

2018

Perc

enta

ge o

f Res

pond

ents

0%

10%

20%

30%

40%

50%

ASX1–50

ASX51–100

ASX101–150

ASX151–200

ASX201–250

ASX251–300

ASX300+

NZX50

Other(please specify)

RESPONDENTS PROFILE BY TITLE

Head/Director/General Manager of Investor Relations 45.35%

20.93%17.44%

11.63%

Investor Relations ManagerOther (please specify)

2.33%Head of Capital Markets

1.16%CFO who assumes responsibility for Investor Relations

1.16%Investor Relations Officer

0.00%CEO who assumes responsibility for Investor Relations

Head of Investor Relations & Corporate Affairs/Corporate Communications

Other includes a combination of: Investor Relations &/or Treasury, Corporate Development, Head of Planning, Head of Corporate Affairs, Senior Investor Relations Analyst, Company Secretary, General Manager Corporate, Head of Strategy, Marketing.

MEDIAN FIXED REMUNERATION OF ALL RESPONDENTS*

$225,000 – $275,000Median remuneration range = consistent with 2017

High-paying sectors = Consumer Discretionary, Energy, Financials, Gold, Metals & Mining, REITs, and Industrials

More responsibilities = higher remuneration

REMUNERATION & GENDERMedian salary Male = $275,000 – $300,000Median salary Female = $225,000 – $250,000

Both male and female salary ranges increased by $25,000 since 2017.

Median salary for both male and female is representative of the market cap in which the majority of each gender is employed. More males are employed at ASX 1-150 versus a greater representation of females at ASX151-300 companies.

REMUNERATION BY COUNTRYMedian Remuneration for Australian companies = $275,000 – $300,000

Median Remuneration for New Zealand companies = $200,000 – $225,000

SHORT-TERM AND LONG-TERM INCENTIVES

Median bonus range = 11%–20% of fixed salary86% received short-term cash bonus. 67% received long- term incentives

Performance rights and shares = most popular methods of incentive pay

TOP 3 KEY PERFORMANCE INDICATORS FOR IR1. No breaches of continuous

disclosure

2. Quality marketplace relationships

3. Accurate analyst and media reports on company

SUCCESSION, CAREER GOALS AND ROLE SATISFACTION38% have succession plans for IR. ASX 51–100, ASX 300+ & NZX 50 are the most forward-looking

• Job satisfaction has increased• Interest in changing jobs

decreased

TOP CHALLENGES FOR IR ROLE1. Balancing information

and relationship needs of company and the market within regulatory environment

2. Cutting through the communication clutter

3. Acquiring resources, includingtime,tofulfildemand for IR services

ESSENTIAL ATTRIBUTES OF IR ROLE1. Having a solid

understanding of business strategy and operations, and investment market processes and needs

2. Being trustworthy by acting with integrity at all times

RESPONDENT PROFILE

46% of respondents were 40-50 years old30% were 30-40 years

62% male38% femaleMedian range for years working as in-house IR= 5-10 years

REPORTING RESPONSIBILITIES

24% report to CEO

62% report to CFO

Most report to a CFO in ASX 1–200 and NZX 50

* Fixed Remuneration refers to median salary, superannuation and other all-in company costs but excludes short and long-term bonus incentives.

Fixed Salary

20%

11%



2018SNAPSHOT

IR CHALLENGE, BALANCING INFORMATION AND RELATIONSHIP NEEDS.

NUMBER

01 2% LESS RECEIVE SHORT-TERM INCENTIVES THAN 2017

86%

RECEIVE LONG-TERM INCENTIVES COMPARED TO 47% IN 2017

56%

WANT TO CHANGE JOBS. 4% REDUCTION ON 2017

35%

MORE COMPANIES HAVE SUCCESSION PLANS UP 4% ON 2017

38%

$425,000 – $450,000

$275,000 – $300,000

MEDIAN FIXED REMUNERATION ASX 20 & 50

UPWARD TRENDS IN EDUCATION QUALIFICATIONS

MEDIAN FIXED REMUNERATION ASX 51-100

AIRA DIPLOMA OF IR

MBA

AIRA CERTIFICATE OF IR

OTHER POST GRAD

STI range haS IncreaSed from 11%-20% To 31-40%


2018SNAPSHOT CONTINUED



1. TOTAL REMUNERATIONInvestor relations practitioners were asked to identify their total annual remuneration (salary + superannuation, excluding cash bonuses and long-term incentives).

• Median remuneration range – overall: $250,000–$275,000 band. This represents a consistency with last year with the exception that the ranges were narrowed this year to $25,000 bands instead of $50,000, therefore the overall result is slightly higher from the 2017 range of $225,000–$275,000.

• High-paying sectors: Consumer Discretionary, Energy, Financials, Gold, Metals & Mining, REITS, and Industrials were the sectors paying above the median remuneration range. Health Care, Materials, Metals & Mining, Telecommunication Services and Utilities joined the list this year.

• ASX 1–100 companies pay more: Respondents in these entities receive higher remuneration with ASX 1–50 almost double the remuneration of practitioners in smaller cap companies.

• Added responsibilities influence higher remuneration: The median remuneration range for practitioners responsible for other activities, such a corporate affairs and corporate communications, was $100,000 higher compared with practitioners without non-IR direct reports. This is in line with results since 2007.

2. REMUNERATION AND REPORTING LINESAnIRpractitioner’sreportinglinecontinuestoinfluenceremuneration.

• Higher remuneration correlated to CFO/CEO reporting line: The median remuneration range for IR practitioners reporting directly to a CFO or CEO was $275,000–$300,000.Thischangemayreflectthemoveto$25,000bands this year instead of $50,000 and not necessarily a reduction in remuneration.

• Longstanding trend: In each AIRA remuneration study since 2006, those reporting to a CEO or CFO received higher remuneration levels than those reporting to other senior executives.

3. SHORT-TERM AND LONG-TERM INCENTIVES• 86% of IR practitioner respondents received short-term

incentives. This was lower than the highest result recorded in an AIRA study last year of 88%. The median range of short-term incentives was 11%–20%, in line with 2017.

• Receiving long-term incentives increased to 56% of respondents compared with 47% in 2017.

• Short-term incentives were based primarily on personal targetsandeconomicprofit.

• A majority of long-term incentives were calculated on total shareholder returns, continuing the trend since the beginning of this study. Performance rights and shares were again the more popular methods of incentive payment.

• Respondents were marginally less positive about their remuneration levels this year.

4. REPORTING RESPONSIBILITIES Across companies by market capitalisation/size, most respondents reported directly to either the CFO or CEO.

• More than half (62%) reported directly to a CFO and 24% reported to a CEO. The remainder reported to either the Head of Corporate Communications or another senior executive.

• The trend increased for IR practitioners working in ASX 1–150 and NZX 50 companies to report predominantly to the CFO.

• he number of respondents with staff in IR roles increased in 2018. Those with staff in non-IR roles increased slightly on 2017.

5. KEY PERFORMANCE INDICATORSKPIs for assessing IR performance and remuneration/bonus levels remained consistent with previous studies.

• The three most reported KPIs for investor relations were:

– quality of relationships with the marketplace

– accurate representation of the company in marketplace (analyst and media) reports

– dissemination of timely, accurate information to the marketplace

6. SUCCESSION, CAREER GOALS AND ROLE SATISFACTION

• Succession plan for IR: The percentage of companies with an IR succession plan increased from 34% to 38%. More than half of the respondents in ASX51-100, ASX 300+ and NZX 50 companies had succession plans.

• Desire to change jobs: The number expressing a desire to change jobs in the coming 12 months reduced to 35%, down from 39% in 2017.

• Satisfaction with remuneration: There was a reduction from 24% to 20% in the numbers describing themselves as either well-remunerated or extremely well-remunerated.

• Satisfaction with role: Respondents were more positive about their jobs compared with those surveyed last year.

• Factors influencing job change: Across all sectors andsizeofcompanies,themajorfactorsinfluencingrespondentstochangejobswereidentifiedas:

– a more challenging/more meaningful role

– being part of a company’s leadership team

– more remuneration

– workinginahigh-profilecompany

Working as the head of IR in another listed entity was the most desired next role for participants. A broader role, retaining IR, in the same company was the next most popular career aspiration.

SUMMARY OFKEY FINDINGS


SUMMARY OFKEY FINDINGS CONTINUED

7. CURRENT CHALLENGESThetopfivechallengesfacedbyIRpractitionersinperforming their roles were:

1. balancing the information and relationship needs of the company and the market within the regulatory environment

2. acquiringtheresources,includingtime,tofulfildemandfor IR services

3. cutting through the communication clutter in the marketplace with clear messages

4. gaining relevant, timely information about the business

5. securing senior management commitment to effective IR

Other current challenges for respondents include: managing structurally challenged sell-side particularly inexperienced sell-side analysts, a lack of capital markets experience by senior executives, consistent communication that builds a story when internal plans keep changing and external regulatory(industryspecific)factorsandtheireffectonmarketsentiment.

8. ESSENTIAL ATTRIBUTES OF THE ROLEThetopfiveattributesofeffectiveIRpractitionersasrankedby respondents were:

1. being an effective communicator

2. being highly numerate and accurate with data

3. being trustworthy by acting with integrity at all times

4. having a solid understanding of business strategy and operations, and investment market processes and needs

5. having strong relationships with internal and external stakeholders

9. RESPONDENT PROFILE• Age profile: 83% of respondents were in the 30–40 years

and 40–50 years age brackets.

• Gender profile: One-third of respondents were female.

• IR role experience profile: The median range for years working as an in-house investor relations practitioner was 3–5 years.

• Market capitalisation profile: 45% and 17% of respondents came from ASX 1–100 and NZX 50 entities respectively.



SECTIONHEAD

V

For more information about this study, please contact AIRA SecretariatAustralasian Investor Relations Association

+61 2 9872 9100

[email protected]

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