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2. FY2018-19 Senior Executive Remuneration

2.1 Remuneration governance at Western Sydney Airport

The role of the People, Remuneration and Nomination Committee (PRNC) is to assist the Board to fulfil its governance responsibilities in relation to people management and remuneration policies.

The table below sets out the roles and responsibilities of the Board, the PRNC and Management in relation to Executive remuneration.

The Board

PRNC

Management

  • Approves WSA’s remuneration approach, structure and outcomes.

  • Makes recommendations to the Board in relation to Senior Executive remuneration policy, strategy, framework and outcomes.

  • Prepares policy recommendations and information for the PRNC’s consideration and approval.

  • Approves WSA’s remuneration incentive and benefits policies, practices and arrangements.

  • Reviews and makes recommendations to the Board on remuneration incentive and benefit policies, practices and arrangements (within the parameters of the guidelines or determinations set by the Commonwealth Remuneration Tribunal (the Tribunal) where applicable).

  • Oversees the implementation of approved remuneration policies and processes.

  • Approves the remuneration of the CEO and Senior Executives.

  • Reviews and recommends to the Board on remuneration of the CEO and Senior Executives, including short-term incentive targets and outcomes.

  • Monitors key employee data (including turnover, hiring rates and engagement) and Board reporting, enabling remuneration and benefits to support the Company’s ability to attract and retain talented people.

  • Review and oversight of the Company’s recruitment practices, learning and development approach and People & Culture initiatives.

Overarching Board discretion

The Board retains overall discretion to adjust remuneration outcomes upwards or downwards. In applying this judgement, the Board will consider a range of factors, including, but not limited to:

  • Safety outcomes, including the delivery of priorities, plus lead and lag indicators;
  • Overall financial outcomes of the Company;
  • Unanticipated political and/or economic events;
  • The quality of the outcome relative to the agreed strategy; and
  • Alignment of individual behaviours with the Company’s vision and values.

Support from external advisers

During FY2018-19, WSA received external advice in relation to remuneration from KPMG. The advice included a review of its Remuneration and Benefits Policy and Short-term Incentive Policy, and benchmarking remuneration data which was used as an input to the annual review of Senior Executive remuneration. The advice provided by KPMG did not constitute a remuneration recommendation as defined in the Corporations Act 2001 (Cth).

2.2 FY2018-19 Remuneration strategy and framework

The Company’s remuneration strategy is aligned with the business plan and aims to deliver superior performance and sustainable growth in the interests of the Greater Western Sydney community. It is designed to attract, grow and retain the quality of people required to deliver the business plan.

Remuneration Principles Market competitive Performance oriented and equitable Aligned with stakeholder and public interest Remuneration Objectives Pay people competitively and reward contributions to WSA’s long-term objectives Consistency and equity in remuneration Remuneration and benefits policies and practices which promote the judicious use of public money Remuneration and benefits governance processes that are transparent and support financial soundness and prudent risk management

FY2018-19 Remuneration Framework The remuneration framework comprises of Fixed Annual Remuneration (FAR) and Short-Term Incentives (STI) and is designed to support the remuneration strategy. FAR FAR includes base salary, superannuation contributions and appropriate benefits provided to Senior Executives. The FAR for the CEO is determined by the Tribunal and the role is classified as a Principal Executive Officer (PEO) Band E. FAR levels are set according to the nature and scope of the Senior Executive’s role, as well as his/her performance and experience. WSA benchmarks its Senior Executive with reference to ASX-listed and unlisted companies of comparative size and complexity, as well as other Government Business Enterprises. STI The STI plan is an annual performance-based incentive paid in cash, with 50% entitlement in the current year and 50% deferred for 12 months for the CEO and Senior Executives. The STI plan is an at-risk, cash-based component of total remuneration. Its purpose is to incentivise Senior Executives to deliver annual performance outcomes aligned to Shareholder Ministers’ interests. The maximum STI opportunity for the CEO for FY2018-19 is 40% of FAR and for the Senior Executives, it is 30% of FAR. The Tribunal sets parameters for the CEO’s performance pay, including the deferral requirement. The STI is linked to individual balanced scorecards of Key Performance Indicators (KPIs), and an assessment against overall results and alignment to the Company’s values. KPIs are a mix of Company financial and non-financial measures (including safety, environment, community and people targets), and individual performance objectives directly related to the Senior Executive’s core area of responsibility. The PRNC makes determinations of individual STI outcomes based on assessment of the KPI outcomes and application of overall discretion (as described above).

2.3 FY2018-19 Remuneration Table

This table presents the Chief Executive Officer’s and senior executives’ remuneration for FY2018-19 with a comparison against FY2017-18 and is shown on an accruals basis.

Short Term Benefits

Post-employment Benefits

Other Long-Term Benefits

Name

Year

Base Salary8

STI Cash

Other benefits

Annual Leave9

Superannuation Contributions

STI Deferred

Long Service Leave

Total Remuneration

$

$

$

$

$

$

$

$

Graham Millett1

2019

703,669

123,114

-

54,128

20,531

123,114

3,266

1,027,822

2018

415,559

67,098

-

35,277

16,707

67,098

714

602,453

Shelley Cole2

2019

479,469

63,750

-

36,882

20,531

63,750

2,352

666,735

2018

326,560

71,461

-

23,110

16,138

-

595

437,864

Maryanne Graham3

2019

324,374

55,026

-

26,267

20,531

55,026

1,651

482,875

2018

158,313

44,384

-

12,253

8,354

-

249

223,553

Katherine Newton-John4

2019

379,469

51,000

-

29,190

20,531

51,000

1,745

532,935

2018

195,230

55,923

-

14,019

12,653

-

359

278,184

Jim Tragotsalos5

2019

442,995

66,300

-

35,789

20,531

66,300

1,788

633,703

2018

37,689

-

-

2,958

3,580

-

56

44,283

Joanne Vaughan6

2019

343,284

54,000

11,838

28,790

20,531

54,000

1,704

514,147

2018

162,410

46,159

-

7,944

11,120

-

324

227,957

Tom McCormack7

2019

316,224

44,828

-

29,190

17,110

44,827

1,763

453,942

2018

-

-

-

-

-

-

-

-

Total

2019

2,989,482

458,018

11,838

240,236

140,298

458,018

14,269

4,312,160

2018

1,295,761

285,025

-

95,561

68,552

67,098

2,297

1,814,294

1 Graham Millett commenced as Executive General Manager Airport Infrastructure on 1 November 2017 (preceding this he was an independent contractor from 18 September 2017). On 23 February 2018 Mr Millett was appointed Chief Executive Officer.

2 Shelley Cole commenced as General Manager Finance 18 September 2017 and subsequently, her position was expanded to Chief Financial Officer on 1 January 2018.

3 Maryanne Graham was appointed Executive General Manager Corporate Affairs on 1 February 2018.

4 Katherine Newton-John was appointed General Counsel and Company Secretary on 27 November 2017.

5 Jim Tragotsalos was appointed EGM Airport Infrastructure on 4 June 2018.

6 Joanne Vaughan was appointed Chief People & Culture Officer on 18 December 2017.

7 Tom McCormack was appointed Chief Information Officer on 1 September 2018.

8 Base salary comprises cash salary excluding annual leave accrued.

9 For FY2018–19 annual leave is the total amount of leave accrued for the period. For FY2017–18 the movement in annual leave provision is presented.


2.4 FY2018-19 STI outcomes for the CEO and the Executives

This table presents the Chief Executive Officer’s and Senior Executives’ Target and Awarded STI for FY2018-19.

Name

Target STI

Awarded STI

Awarded STI as % of Target

Forfeited STI

STI Cash

STI Deferred

$

$

$

$

$

Graham Millett

289,680

246,228

85%

43,452

123,114

123,114

Shelley Cole

150,000

127,500

85%

22,500

63,750

63,750

Maryanne Graham

122,280

110,052

90%

12,228

55,026

55,026

Katherine Newton-John

120,000

102,000

85%

18,000

51,000

51,000

Jim Tragotsalos

156,000

132,600

85%

23,400

66,300

66,300

Joanne Vaughan

120,000

108,000

90%

12,000

54,000

54,000

Tom McCormack

99,616

89,655

90%

9,961

44,827

44,827

Total

1,057,576

916,035

-

141,541

458,018

458,018

2.5 FY2018-19 STI scorecard outcomes for the CEO and Senior Executives

The CEO and Executive scorecards contain a range of financial and non-financial KPIs that are aligned to the strategic priorities of Western Sydney International.

The Company’s scorecard in FY2018-19 is detailed below:

Strategic Domain KPI

KPI Description

Performance Outcome

Safety Record

Measures WSA’s success in cultivating and reinforcing a zero-harm, prevention and protection mindset amongst employees, contractors and consultants. TRIFR < 5.

Achieved

TRIFR = 3.4

Employee Engagement

Measure agility, engaging leadership, talent focus, and commitment to roles. Baseline to be established following collection of initial employee feedback.

Achieved

Baseline = 66%

Community Engagement

Measures the extent of community engagement undertaken by WSA and subsequent awareness of Western Sydney Airport. Baseline to be established following initial community feedback.

Achieved

Baseline = 63%

Environmental Performance

Measures performance relating to environmental conditions imposed upon WSA during construction (as per the Airport Plan, Environmental Impact Statement, and associated Construction Environment Management Plans). Meet all relevant conditions.

Achieved

Financial Performance

Measure of actual expenditure relative to budgeted forecasts. Expenditure within budget.

Achieved