At the beginning of each financial year, Rest Group Executives are assigned a number of outcome-related performance goals that reflect a combination of group and individual stretch objectives that align with the Rest Strategy. All goals are reviewed by the People, Culture and Remuneration Committee of the Rest Board in the first quarter of each financial year.
Group Executives may be awarded variable remuneration, or an STI, for achieving and exceeding these measurable stretch outcomes. Group Executives will be required to pass a risk and behaviour gateway and have their performance assessed against their group and individual scorecard to be eligible to receive variable remuneration.
Performance measures consist of group measures and individual measures. Material weight is given to non-financial performance measures:
- Group performance is based on the Group Outcomes Scorecard (GOS) with measures linked to member outcomes. The GOS is designed to incentivise Group Executives to work together to achieve common outcomes. The Board and PCRC annually sets GOS weightings and targets.
- Individual performance is based on the Individual Outcomes Scorecard (IOS). The IOS is based on individual objectives. The IOS is designed to reward Group Executives for achieving individual goals. The PCRC and Board approves Group Executive IOS goals and measures.
Payout of any variable remuneration to an individual is subject to any downward adjustment based on the criteria set out in the Consequence Management Framework (which includes adjustments where conduct and behaviour have not met Rest’s standards). In particular, Rest will consider an adjustment in the following circumstances:
- Misconduct leading to an individual benefitting (financially or otherwise) including consequentially
- Misconduct leading to significant adverse outcomes
- A significant failure of financial or non-financial risk management
- A significant failure or breach of accountability, fitness and propriety, or compliance obligations
- A significant error or a significant misstatement of criteria on which the variable remuneration determination was based
- Significant adverse outcomes for customers, beneficiaries or counterparties.
The Board reserves the right to apply malus and clawback to deferred variable remuneration according to the Consequence Management Framework and at its discretion.
Overall performance is assessed on:
- Achievement of GOS and the IOS and
- Demonstrated behaviour of Rest values.
Assessment of performance against goals is based on quantifiable evidence, including audit findings, stakeholder feedback and financial management. Assessment of behaviour is undertaken using the Rest Values and Behaviours.
Where, in the opinion of the CEO, an individual has demonstrated a serious breach or sustained failure to act in accordance with Rest’s values and/or has engaged in conduct or incidents that have not met Rest’s standards, a recommendation may be put to the Board that no variable remuneration be payable. The Board also retains ultimate discretion on whether a Group Executive should receive variable remuneration.
All performance assessments for Rest Executives are reviewed by the People, Culture and Remuneration Committee of the Rest Board, and any changes to remuneration (including STI payments) are subject to the approval of the Rest Board.
Procedures to evaluate the performance of the senior managers takes place annually.