Downer’s remuneration framework for key senior employees has been successful in creating alignment between senior Executives and shareholders. Executive remuneration has a fixed component and a component that varies with performance. Performance is assessed annually for periods covering one year and three years. Payment for performance assessed over one year is a Short-Term Incentive (STI). Payment for performance over a three-year period is a Long-Term Incentive (LTI).
The STI performance is assessed on Group NPATA, Divisional EBITA, Free Cash Flow, Zero Harm, Sustainability and a measure of employee engagement. An overarching financial gateway applies to entry into the STI scheme to ensure rewards are founded on financial sustainability. Independent gates apply to the Zero Harm STI scorecard. For Safety, any work-related fatality within the performance year for a Business Unit will make that Business Unit ineligible for 50 per cent of the Zero Harm scorecard. For the Sustainability/GHG emissions element, any Level 5 or 6 environment incident will make that Business Unit ineligible for 50 per cent of the STI Zero Harm scorecard. The same applies to Downer Corporate.
The Zero Harm element includes safety and environmental measures, underscoring Downer’s commitment to customers, employees, regulators and the communities in which we operate.
The measures for the Zero Harm element of the scorecard are set out below. The People element assesses employee engagement via feedback in Downer’s annual Employee Engagement Survey.
Achieve Lost Time Injury Frequency Rate (LTIFR) and Total Recordable Injury Frequency Rate (TRIFR)below the defined threshold for area of responsibility:
|Zero Harm - Critical Risk||10%||No actions overdue >30 days arising from High Potential incidents.||Each Business Unit Head to lead a Group-wide Community of Practice (CoP) focusing on better control of one Critical Risk. The CoP must deliver a set of minimum deliverables.||A minimum of two of the Stretch deliverables are met during the CoP identified in TargetThe Business Unit undertakes a detailed analysis to understand the top three controls requiring improvement.|
|Sustainability||15%||Each Business Unit:
||Each Business Unit:
||Each Business Unit demonstrates they are on track to achieve the GHG emissions science-based target, and Group achieves Sustainability Linked Loan (GHG emissions intensity) Stretch target.|
|People||10%||Business Units are assessed on a measure of employee engagement|
|Financial||60%||Refer to Downer's 2022 Annual Report for Financial targets|