This report details the nature and amount of remuneration for
each key management person of MGC Pharmaceuticals Ltd, and
for the executives receiving the highest remuneration.
Remuneration Policy
The remuneration policy of MGC Pharmaceuticals Ltd has
been designed to align key management personnel objectives
with shareholder and business objectives by providing a
xed remuneration component and offering specic long-
term incentives based on key performance areas affecting
the consolidated group’s nancial results. The Board of MGC
Pharmaceuticals Ltd believes the remuneration policy to be
appropriate and effective in its ability to attract and retain
the best key management personnel to run and manage the
Group, as well as create goal congruence between directors,
executives and shareholders.
The Board’s policy for determining the nature and
amount of remuneration for key management
personnel of the Group is as follows:
• The remuneration policy, setting the terms and conditions for
the key management personnel, was developed and approved
by the Board.
• All key management personnel receive a base salary (which
is based on factors such as length of service and experience),
superannuation, fringe benets, options and performance
• The Board reviews key management personnel packages
annually by reference to the consolidated group’s performance,
executive performance and comparable information from
industry sectors.
The performance of key management personnel is measured
against criteria agreed annually with each executive and is based
predominantly on the forecast growth of the Group’s prots and
shareholders’ value. All bonuses and incentives must be linked to
predetermined performance criteria.
The Board may, however, exercise its discretion in relation to
approving incentives, bonuses and options. Any changes must be
justied by reference to measurable performance criteria.
The policy is designed to attract the highest calibre of executives
and reward them for performance that results in long-term
growth in shareholder wealth.
Key management personnel are also entitled to participate in the
employee share and option arrangements.
All remuneration paid to key management personnel is valued
at the cost to the Company and expensed. Shares given to key
management personnel are valued as the difference between
the market price of those shares and the amount paid by key
management personnel. Options are valued using the Black-
Scholes methodology.
The Board policy is to remunerate Non-Executive Directors at
market rates for time, commitment and responsibilities. The
Board determines payments to the Non-Executive Directors
and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice
is sought when required. The maximum aggregate amount of
fees that can be paid to Non-Executive Directors is subject to
approval by shareholders at the Annual General Meeting. Fees
for Non-Executive Directors are not linked to the performance
of the consolidated group. However, to align directors’ interests
with shareholder interests, the Directors are encouraged to
hold shares in the Company and are able to participate in the
employee option plan.
Performance-based Remuneration
As part of each member of the key management personnel’s
remuneration package there is a performance-based component,
consisting of key performance indicators (KPIs). The intention
of this program is to facilitate goal congruence between
key management personnel with that of the business and
shareholders. The KPIs are set annually, with a certain level of
consultation with key management personnel to ensure buy-
in. The measures are specically tailored to the areas each key
management personnel are involved in and have a level of control
over. The KPIs target areas the Board believes hold greater
potential for group expansion and prot, covering nancial and
non-nancial as well as short- and long-term goals. The level
set for each KPI is based on budgeted gures for the group and
respective industry standards.
Remuneration Report (Audited)
| Annual Report 2018