H. NON-EXECUTIVE DIRECTOR REMUNERATION
I. Remuneration policy
The principles that underpin IAG’s approach to remuneration for Non-Executive Directors are that remuneration should:
be sufficiently competitive to attract and retain a high calibre of Non-Executive Director; and
create alignment between the interests of Non-Executive Directors and shareholders through the mandatory shareholding
requirement.
II. Remuneration structure
Non-Executive Director remuneration has three components:
board fees (paid as cash);
superannuation; and
subsidiary board and committee fees.
a. CHANGES TO NON-EXECUTIVE REMUNERATION DURING THE YEAR ENDED 30 JUNE 2015
On 14 August 2014, the Board approved a 3% increase in the Board and Committee fees effective from 1 July 2014. The aggregate
limit of Board fees approved by shareholders at the annual general meeting in October 2013 remains unchanged at $3,500,000 per
annum.
The figures shown below are inclusive of superannuation. Directors can elect the portion of fees contributed into their nominated
superannuation fund, provided minimum legislated contribution levels are met.
TABLE 13 - BOARD AND COMMITTEE FEES
ANNUAL FEE
BOARD/COMMITTEE
ROLE
2015
2014
Board
Chairman
$565,800
$549,300
Non-Executive Director
$188,600
$183,100
Audit Committee
Chairman
$40,900
$39,700
Member
$20,450
$19,850
Risk Committee
Chairman
$40,900
$39,700
Member
$20,450
$19,850
People and Remuneration Committee
Chairman
Member
$40,900
$20,450
$39,700
$19,850
Nominations Committee
*
Chairman
Member
N/A
$10,000
N/A
N/A
*
IAG established a Nominations Committee on 1 July 2014. No fees are payable to the Chairman.
b. SUBSIDIARY BOARD AND COMMITTEE FEES
A summary of Non-Executive Directors’ service on subsidiary boards and the fees paid are set out below:
TABLE 14 - FEES FOR NON-EXECUTIVE DIRECTORS' SERVICE ON SUBSIDIARY BOARDS
DIRECTOR
SUBSIDIARY
CAPACITY
ANNUAL FEE
Brian Schwartz
Insurance Manufacturers of Australia Pty Limited
Chairman
$247,000
Hugh Fletcher
*
IAG New Zealand Limited
Chairman
$139,590
* This amount was paid to Hugh Fletcher in New Zealand dollars and has been converted to Australian dollars using the average exchange rate for the year.
III. Board performance
A formal external review of the performance, composition and size of the Board is conducted every three years. A formal review was
conducted in the 2014 financial year. In the years this review is not conducted, performance is evaluated by the Chairman via
discussion between the Chairman and the individual Director. In reviewing Directors’ performance the Chairman and Board consider:
the Director's contribution to Board teamwork;
the Director's contribution to debates on significant issues and proposals;
advice and assistance given to management;
in the case of the Chairman’s performance, the fulfilment of the additional role as Chairman; and
input regarding regulatory, industry and social developments surrounding the business.
The PARC is responsible for coordinating the Board’s review of the Chairman’s performance.
32 IAG ANNUAL REPORT 2015
