Directors’ Report
53
Directors’ Report
Long-term incentives
Effective from 1 July 2012, the Group implemented an LTI Plan, also referred to as the Executive Rights Plan. The objectives of the LTI Plan are to retain key 
executives and to align an at-risk component of certain executives’ remuneration with shareholder returns.
Key features of the LTI Plan are outlined in the table as follows:
Overview of the LTI Plan
What is the LTI Plan and  
who participates?
In general, executives can be granted Kingsgate Consolidated Limited rights each year, although an award of rights does not 
confer any entitlement to receive any subsequent awards. In awarding rights the Board takes into account such matters as 
the position of the eligible person, the role they play in the Company, their current level of fixed remuneration, the nature of 
the terms of employment and the contribution they make to the Group. Currently only members of the Executive 
Management group and key site based operational senior management are eligible to participate in the LTI plan.
How much can the executives 
earn under the LTI Plan?
Managing Director / CEO – up to 45% of TFR as Performance Rights.  
COO / CFO / Executive Management – up to 12.5% of TFR as Deferred Rights and additionally, up to 12.5% of TFR as 
Performance Rights.
What is awarded under the 
LTI Plan?
Two types of rights are offered under the LTI Plan: Deferred Rights and Performance Rights. 
Is there a cost to participate? The rights are issued for nil consideration and are granted in accordance with performance guidelines established by the 
Remuneration Committee and approved by the Board. 
What are the performance 
and vesting conditions?
Deferred Rights - vesting is time based. 
Performance Rights – refer to Vesting Schedule for Performance Rights below. 
What is the performance /
vesting period?
Deferred Rights are subject to three year vesting periods. There are no performance conditions attached to the Deferred 
Rights.  
Performance Rights are subject to a three year performance measurement period from 1 July in the year when the grant 
occurs.
How does the LTI vest? Performance Rights vest subject to the achievement of a hurdle based on total shareholder return. Further information on the 
vesting scale is below.
Is the LTI subject to 
retesting?
There is no retesting of either the Deferred Rights or Performance Rights. 
Who assesses performance? Performance is assessed against a TSR Alpha™ measure prescribed in the Vesting Schedule for Performance Rights below. 
The Remuneration Committee signs off performance assessment based on recommendations by the Managing Director/CEO 
with advice from Godfrey Remuneration Group Pty Ltd in terms of TSR Alpha™ relative performance.
How is the LTI delivered? On vesting the first $1,000 value of each of the Deferred Rights and Performance Rights awards is paid in cash, e.g. if both 
Deferred and Performance Rights vested at the same time then the participant would receive two x $1,000 with the 
remaining value of the award received as shares in the Company as per below. 
Number of shares = (number of vested rights x share price on vesting date – $2,000) ÷ share price on vesting date.
What happens in the event  
of bonus shares, rights  
issues or other capital 
reconstructions?
If between the grant date and the date of conversion of vested rights into cash and restricted shares there are bonus shares, 
rights issues or other capital reconstructions that affect the value of Kingsgate Consolidated shares, the Board may subject 
to the ASX Listing Rules make adjustments to the number of Rights and / or the vesting entitlements to ensure that holders 
of rights are neither advantaged or disadvantaged by those changes.
Takeover or Scheme  
of Arrangement?
Unvested rights vest in the proportion that the share price has increased since the beginning of the vesting period. All vested 
rights need to be exercised within three months of the takeover.