Sunday, 27 May 2018


GENERAL: LPC: Lyttelton Port Company Ltd - Chief Executive Remuneration

04 Dec 2012 17:06NZX
04 December 2012



Lyttelton Port Company Limited (LPC) is a company listed on the New Zealand
Stock Exchange and meets its disclosure requirements under IFRS and NZX
listing rules.

As a result of the recent interest regarding the Chief Executive''s
remuneration, the Board of LPC wishes to provide further clarification on
this matter.

A highly functioning and successful port is one of the cornerstones of a
growing economy.

LPC has again shown its ability to perform, under extremely difficult
circumstances, its vital role in the economic growth of Canterbury and New
Zealand as a crucial facilitator of trade for the region.

The Port suffered massive damage during the earthquakes of 2010 and 2011.
The insurance claims from LPC are expected to be some of the largest in New
Zealand''s history as a result of these catastrophic events.

A critical strategy has been ensuring the Port has the best leadership to
navigate through the insurance matters and the plan to not only rebuild the
Port but to cement its position as the primary port in the South Island.

The Port is one of the key strategic assets to drive economic growth in
Christchurch, Canterbury and the South Island.

Over the years, the Board of LPC have developed a policy for incentivising
the Chief Executive in consultation with independent remuneration experts.
The Chief Executive has had to take on an even greater leadership role since
the earthquakes.

The Board sets the remuneration structure for the Chief Executive, Peter
Davie, using specialist external advice, and sets his Total Fixed
Remuneration (TFR) annually.  The variable component of his remuneration
includes Short Term and Long Term Incentives (STIs and LTIs) and a percentage
of the Chief Executive''s annual TFR is "at risk" based on his and the
company''s performance.

o The scheme is set and assessed annually; targets include financial
performance, operational performance and leadership
o Base performance = 20% of TFR
o Exceptional performance = 40% of TFR

o The scheme was developed by Godfrey Remuneration Group Pty Limited and
Strategic Pay and approved by the Board in 2006
o The scheme is based on Earnings per Share growth over a rolling three
period compared to benchmarks set for performance characterised as:
- Threshold: 8% average compounding growth per annum
- Target: 10% average compounding growth per annum
- Stretch: 16% average compounding growth per annum
o Threshold performance = 22.5% of TFR
o Target performance = 45% of TFR
o Stretch performance = 90% of TFR
o There were no payouts in the first two cycles
o For the year ended 30 June 2011 (third cycle), stretch performance was
achieved, with a payment made in the 2011/12 financial year
o The year to 30 June 2012 was the fourth cycle, and stretch performance was
achieved, with a payment made in the 2012/13 financial year
o The Board approved a fifth cycle in 2010, making 30 June 2013 the last year
of the current scheme. If threshold, target or stretch performance is
achieved in the year to 30 June 2013 then the remuneration for that
performance will be paid in the 2013/14 financial year.

The table below outlines the remuneration paid to the Chief Executive over
the last five years to 30 June 2012.

The Board and Chief Executive will not be making any further statements on
this matter at this time and believe this provides the necessary
clarification and assurances required.

End CA:00230667 For:LPC    Type:GENERAL    Time:2012-12-04 17:06:23
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