Following a comprehensive assessment of the remuneration framework in FY2020, the Board proposed the adoption of a new model better suited to Origin’s business and based on restricted share rights with longer deferral periods, the LTSP. The assessment showed that the existing Long Term Incentive Plan (LTIP) structure is not achieving its key objectives of attracting executive talent, retaining key leaders and contributing to the generation of executive share ownership thereby aligning executive and shareholder interests. The Board believes that the LTIP is not well suited to the commodity nature, and the investment profile, of the energy industry.
Origin Chairman Mr Gordon Cairns said, “Following extensive engagement with investors and other stakeholders over recent weeks, the Board recognises there remain some shareholder reservations about the proposed introduction of a restricted share plan with longer deferral provisions to replace our existing LTIP.
“In response to shareholder feedback, the Board will not replace the LTIP and will instead modify it by reducing the maximum achievable from 180 per cent to 120 per cent of Fixed Remuneration, retaining the existing Relative Total Shareholder Return (TSR) performance hurdle for 50 per cent of the grant and restrict the LTSP component for the balance. We believe this strikes a sensible balance between the conventional external hurdle approach and the incorporation of new arrangements which the Board firmly believes is right for our business and for the future.”
Further details on the modified LTIP and the CEO’s award are set out in the Annexure to this announcement.
As previously advised, any shares arising from the vesting of the rights from the FY2021 grant will be satisfied by purchasing on market.
Withdrawal of Resolution 4 will not affect the validity of the proxy form provided in connection with the 2020 Notice of Annual General Meeting or any proxy forms already submitted.