Executive Remuneration
Executive Remuneration
Mr Lucas is an employee of the Babcock & Brown group. Similarly, the staff of the Responsible Entity are employees of the Babcock & Brown group who have been seconded to the Responsible Entity. As such, all of these people are remunerated by the Babock & Brown group, and by the Responsible Entity or the Trust.
The remuneration practices of the Babcock & Brown group apply to the remuneration of the above Executive Directors and staff. For details regarding the remuneration practices of the Babcock & Brown group, please refer to the Remuneration Report in the Annual Report of Babcock & Brown Limited. Such remuneration practices are structured to be competitive and to ensure that the Babcock & Brown group can attract and retain the talent needed to achieve both short- and long-term success, while maintaining a strong focus on teamwork, individual performance and the interests of unitholders.
Total remuneration of such Directors and staff by the Babcock & Brown group is delivered through base salary, an annual performance bonus and, for some executives, through an equity incentive plan of Babcock & Brown Limited. Babcock & Brown are currently reviewing the remuneration philosophy and framework as it applies to the Trust and intends that this framework should further align their interests with the unitholders of the Trust.
The Board acknowledges that the remuneration of the Directors and staff by the Babcock & Brown group is also partly determined by reference to the performance of that group and their individual performance in connection with that group. This may also be the case in respect of some senior staff of the Responsible Entity from time to time. In this regard, the Board recognises that there is scope for potential conflicts of interest to arise, both in terms of the dual roles of the Directors and certain staff. For instance, the Babcock & Brown group in expected to earns fees and other income from its dealings with the Trust, and the remuneration of the Directors by the Babcock & brown group may be partly determined by reference to the level of such fees and income.
The most important mechanism to deal with such potential conflicts of interest is that the Board is comprised of a majority of Independent Non-Executive Directors, who thus control the decisions. In addition, the Board implements steps to ensure that the conflicts are declared, managed, and where practcable, removed. Such steps include ensuring that Directors declare a conflict in the circumstances where there are material dealings between the Babcock & Brown group and the Trust and that, in most cases, Directors abstain from voting on such matters. other steps may include seeking Independent third party advice or verification, engaging an alternative person to provide the relevant service, or having matters considered by a Committee of the Board comprised solely of Independent Non-Executive Directors. These measures are designed to ensure that, in the event of any conflict of interest, the interests of the unitholders are given priority over the interest of the Responsibly Entity, the Babcock & Brown group and the Directors.
The equity incentive plan described above relates only to Babcock & Brown Limited securities, and does not involve the issuance of units, options or other securities of the Trust.