2019 INVESTOR RELATIONS REMUNERATION & …

Advancing the awareness of and best practice in investor relations in Australasia

2019INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIESEXECUTIVE SUMMARYAnnual assessment of compensation, roles and skills survey of investor relations practitioners from Australian and New Zealand listed entities conducted by Australasian Investor Relations Association (AIRA)

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

Please do not distribute.

NOVEMBER 2019

© 2019 Australasian Investor Relations Association. All rights reserved.

2019 INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIESB

CONTENTS

RESEARCH PURPOSE AND APPROACH 22019 SNAPSHOT 3SUMMARY OF KEY FINDINGS 51. Fixed 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. Fixed annual remuneration (all-in company costs)

excluding bonuses and other incentives 72. Short-term incentive 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 1610. Titles and salaries of direct reports to IR head 1711. Recruitment practices 1912. Key performance indicators for IR function 1913. Current challenges faced by IR practitioners 1914. Job satisfaction 2015. Succession planning for IR function 2016. Desired career paths 2117. Attributes of effective IR practitioners 22ABOUT IR SKILLS AND EXPERIENCE 2318. Highest level of education completed by IR

practitioners 2319. Experience as an IR practitioner 2420. Role prior to current IR role 24RESPONDENT PROFILES 2621. ASX / NZX ranking of respondent companies 2622. Respondentprofiles 26CONTACT DETAILS 28

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.

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). For market cap break down dual listed entities are displayed under both exchanges.

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 about IR compensation section includes details relating to the respondents of this report. About IR roles 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.

1 2019 INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES IN AUSTRALASIAN LISTED ENTITIES © 2019 Australasian Investor Relations Association. All rights reserved.

We’re delighted to collaborate with AIRA on its 13th 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 is important in bridging the gap between listed entities, their shareholders and the investment community.

Computershare is commited to providing ongoing support to the entities we work with by delivering:

• Certainty: through specialised knowledge of global andlocal compliance

• Ingenuity: advocacy for our clients, on the issues thatmatter most

• Advantage: valuable research and insights, to help ourclients make informed decisions

We look forward to further collaborating with AIRA, as the 2019 Research and Insights Partner, in advancing the role of Investor Relations across Australasian listed entities.

THIS IS THE 13TH ANNUAL INVESTOR RELATIONS REMUNERATION & RESPONSIBILITIES STUDY


2 2019 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 2019, 187 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 practitioners completed the questionnaire, representing a response rate of 43%.Last year 225 IR practitioners were invited to participate and 85 completed the questionnaire, 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

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

2018

2017

2016

2015

2019

RESPONDENTS PROFILE BY TITLE

Head/Director/General Manager of Investor Relations

47.50%

16.25%13.75%11.25%

Other

2.50%

2.50%

2.50%Investor Relations Officer 2.50%

CEO who assumes responsibility for Investor Relations

Head of Investor Relations & Corporate Affairs/Corporate Communications

Investor Relations Manager

CFO who assumes responsibility for Investor RelationsCompany Secretary who assumes responsibility for Investor RelationsHead of Capital Markets

1.25%

Other includes a combination of VP-Finance, Treasury & Investor Relations, GM - Marketing & Corporate, Strategy and Investor Relations, Group Financial Controller & Investor Relations Manager, Head of Corporate Affairs, EGM - Investor Relations & Sustainability, Head of Investor Relations & Group Treasurer, VP Corporate Group Senior Manager, Head of Investor Relations and Corporate Strategy.

MEDIAN FIXED REMUNERATION OF ALL RESPONDENTS*

$301,000 – $325,000Median remuneration range = increased ($251,000-$275,000 in 2018)

High-paying sectors = Industrials, Financials and Energy.

Across ASX 50 Companies therewasadecreaseinfixedremuneration and an increase in total remuneration at risk.

REMUNERATION & GENDER OF ALL RESPONDENTSMedian salary Male = $326,000 – $350,000Median salary Female = $251,000 – $275,000

Male salary range increased by $50,000 and Female salary range increased by $25,000 since 2018

More males are employed at ASX 1-150 companies and greater representation of females at ASX151-200 companies

REMUNERATION BY COUNTRYMedian Remuneration for Australian companies = $301,000 – $325,000

Median Remuneration for New Zealand companies = $201,000 – $225,000

SHORT-TERM AND LONG-TERM INCENTIVES

Median bonus range = 21%–30% of fixed salary90% received short-term cash bonus. 52% received long- term incentives

Performance rights and shares = most popular methods of incentive pay

TOP 3 KEY PERFORMANCE INDICATORS FOR IR1. Quality marketplace

relationships

2. Accurate representation ofthe company in marketplacereports

3. Dissemination of timely,accurate information to themarketplace

SUCCESSION, CAREER GOALS AND ROLE SATISFACTION39% have succession plans for IR

24% desire to change jobs in coming 12 months

• Job satisfaction remained thesame as 2018

TOP CHALLENGES FOR IR ROLE1. Balancing information

and relationship needsof company and themarket within regulatoryenvironment

2. Acquiring resources,includingtime,tofulfildemand for IR services

3. Cutting through thecommunication clutter

ESSENTIAL ATTRIBUTES OF IR ROLE1. Being trustworthy by acting

with integrity at all times2. Having a solid

understanding of businessstrategy and operations,and investment marketprocesses and needs

3. Being an effectivecommunicator

RESPONDENT PROFILE

68% of respondents were 30-49 years old39% from ASX 50 companies16% from NZX 50 companies

70% male30% femaleMedian range for years working as in-house IR = 5-10 years

REPORTING LINES

21% report to CEO

63% report to CFO46% ASX 101-150 respondents report to a CEO

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

Fixed Salary

30%

21%



2019SNAPSHOT

ACQUIRING RESOURCES TO FULFIL DEMAND FOR IR SERVICES

NUMBER

01 4% INCREASE IN SHORT-TERM INCENTIVES COMPARED TO 2018

90%

RECEIVE LONG-TERM INCENTIVES COMPARED TO 56% IN 2018

52%

WANT TO CHANGE JOBS - 11% REDUCTION ON 2018

24%

MORE COMPANIES HAVE SUCCESSION PLANS 1% INCREASE ON 2018

39%

$376,000 – $400,000

$201,000 – $225,000

MEDIAN FIXED REMUNERATION ASX 50

UPWARD TRENDS IN EDUCATION QUALIFICATIONS

MEDIAN FIXED REMUNERATION NZX 50

AIRA DIPLOMA OF IR

MBA

AIRA CERTIFICATE OF IR

OTHER POST GRAD


2019 SNAPSHOTCONTINUED



1. FIXED REMUNERATIONInvestor relations practitioners were asked to identify theirfixedannualremuneration(salary+superannuation,excluding cash bonuses and long-term incentives).

• Median remuneration range – overall: $301,000–$325,000 band. This represents an increase from last yearwhen the median range recorded was $250,000–$275,000.

• High-paying sectors: The top three paying sectors wereIndustrials, Financials and Energy.

• ASX 1–150 companies are realigning: ASX 1-50companies reported a higher level of remuneration “atrisk” in 2019. Fixed median remuneration decreasedhowever there was an increase in bonus payments inthe form of STIs. ASX 51-150 companies increased in2019. NZX 50 remained inline with 2018. ASX 151-200companies decreased during 2019.

2. REMUNERATION AND REPORTING LINESAnIRpractitioner’sreportinglinecontinuestoinfluenceremuneration.

• Higher remuneration correlated to CFO/CEO reportingline: The median remuneration range for IR practitionersreporting directly to a CFO increased to $326,000–$350,000, higher than other reporting lines in 2019. Thosereporting to CEO’s received the highest remuneration in2018.

• Longstanding trend: In each AIRA remuneration studysince 2006, those reporting to a CEO or CFO receivedhigher remuneration levels than those reporting to othersenior executives.

3. SHORT-TERM AND LONG-TERM INCENTIVES• 90% of IR practitioner respondents received short-term

incentives. This was an increase to the highest resultrecorded in an AIRA study in 2017 of 88%. The medianrange of short-term incentives was increased in 2019 to21%- 30% (11%-20%, in 2017 and 2018).

• Median bonus payment ranges decreased for ASX 51-100companies, all other market capitalisation/size rangesincreased.

• Median bonus payment ranges for respondents reportingto CFO and other senior executives increased while thosereporting to a CEO remained unchanged.

• Short-term incentives were based primarily on personaltargetsandeconomicprofit.

• Receiving long-term incentives decreased to 52% ofrespondents compared with 56% in 2018.

• A majority of long-term incentives were calculated ontotal shareholder returns, continuing the trend since thebeginning of this study. Performance rights and shareswere again the more popular methods of incentivepayment.

• Respondents indicated they were adequately remuneratedin 2019.

• Respondents working at ASX 50 companies were thehighest to report they were well-remunerated. Thepercentage of NZX 50 companies that felt they wereunder-remunerated increased.

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

• More than half, 63% reported directly to a CFO and 21%reported to a CEO. The remainder reported directly to theBoard, the Head of Corporate Communications/CorporateAffairs or other senior executives.

• The trend continued for IR practitioners working in ASX1–100, ASX 151-200 and NZX 50 companies to reportpredominantly to the CFO. The majority of ASX 101-150companies reported to the CEO.

• The number of respondents with staff in IR roles continuedto increase in 2019. Those with staff in non-IR rolesdecreased in 2019.

• Recruitment in 2019 increased with 38% of respondentshaving recruited compared to 29% in 2018.

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 tothe marketplace

6. SUCCESSION, CAREER GOALS AND ROLESATISFACTION

• Succession plan for IR: The percentage of companies withan IR succession plan remained in line with the previousreport at 39%.

• Desire to change jobs: The number expressing a desireto change jobs in the coming 12 months reduced to 24%,down from 35% in 2018.

• Satisfaction with remuneration: Respondents describingthemselves as either well-remunerated or extremelywell-remunerated was 19%, in line with 20% in 2018. Thepercentage of NZX 50 respondents that reported theywere under-remunerated increased to 25% (17% in 2018).31% of ASX 50 companies reported being extremely well-remunerated.

• Satisfaction with role: Respondents rated their jobs as“same as last year”

• Factors influencing job change: Across all sectorsandsizeofcompanies,themajorfactorsinfluencingrespondentstochangejobswereidentifiedas:

– a more challenging/more meaningful role

– being part of a company’s leadership team

– more remuneration

– workinginahigh-profilecompany

– working in a larger company

Working as the head of IR or in a broader corporate role that includes IR in another listed entity remained the most desired next role for participants.

SUMMARY OFKEY FINDINGS


SUMMARY OFKEY FINDINGS CONTINUED

7. CURRENT CHALLENGESThetopfivechallengesfacedbyIRpractitionersinperforming their roles were:

1. acquiringtheresources,includingtime,tofulfildemandfor IR services

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

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

4. changing investment market landscape eg. ESG, MiFID II, growth of passive investment

5. gaining relevant, timely information about the business

8. ESSENTIAL ATTRIBUTES OF THE ROLEThetopfiveattributesofeffectiveIRpractitionersasrankedby respondents were:

1. being trustworthy by acting with integrity at all times

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

3. being an effective communicator

4. being highly numerate and accurate with data

5. having strong relationships with internal and external stakeholders

9. RESPONDENT PROFILE• Age profile: 68% of respondents were in the 30-39 years

and 40-49 years age brackets.

• Gender profile: 30% of respondents were female.

• IR role experience profile: The median range for years working as an in-house investor relations practitioner was 5-10 years.

• Market capitalisation profile: 39% of respondents came from ASX 50 companies and 16% from NZX 50 listed entities.

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ABOUT IR SKILLSAND EXPERIENCE

V

AIRARecruitARE YOU RECRUITING A SPECIALIST INVESTOR RELATIONS ROLE?AIRARecruit - offers Investor Relations recruitment solutions to cater specifically for Investor Relations requirements:• Full service recruitment offering

• Targeted job advertisements

• Online Resume Bank

Heads of Investor Relations | Investor Relations Managers | Investor Relations Analysts | Investor Relations Support Roles

FOR MORE INFORMATION ABOUT THIS STUDY PLEASE CONTACT AIRA SECRETARIAT

AUSTRALASIAN INVESTOR RELATIONS ASSOCIATION

+61 2 9872 9100

[email protected]

2019 INVESTOR RELATIONS REMUNERATION & …

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