Comparison of Remuneration Approaches of Saracen Mineral Holdings Limited and Newcrest Mining Ltd

MANAGERIAL ACCOUNTING 1
MANAGERIAL ACCOUNTING
By (Name)
Name of the Course
Professor
Name of University
City and State
Date

MANAGERIAL ACCOUNTING 2
Introduction
This paper is mainly purposed for analyzing and comparing the methods or approaches of
remuneration used by Saracen Mineral Holdings Limited and Newcrest Mining Ltd. In this
report, an analysis of how well the approaches of each company worked in encouraging higher
performance by the executive teams is given. In addition, this report considers whether or not
this performance translated to higher performance of the companies.
1. Remuneration Committee and Its Membership
a. Saracen Mineral Holdings Limited
According to the 2018 annual report of Saracen Mineral Holdings Limited, the
remuneration committee of the company for the financial year 2018 were Geoffrey Clifford,
Raleigh Finlayson, Mark Connelly, Martin Reed, Roric Smith and Samantha Tough. The Key
Management Personnel (KMP) during the financial year 2018 were Morgan Ball, Simon Jessop,
Daniel Howe, William Irvin and Marianne Dravnieks.
b. Newcrest Mining Ltd
According to the 2017 annual report of Newcrest Mining Ltd, the company had the
following directors in its remuneration committee:
i. Sandeep Biswas, CEO.
ii. Gerard Bond, CFO.
iii. Melanie Allibon, EGM.
iv. Craig Jetson, EGM.
v. Craig Jones, EGM.

MANAGERIAL ACCOUNTING 3
vi. Ian Kemish, EGM.
vii. Francesca Lee, EGM.
viii. Michael Nossal, CDO.
ix. Philip Stephenson, EGM.
x. Bonikro, EGM.
2. Allocation of Executive Remuneration (Fixed pay/STIs/LTIs)
a. Saracen Mineral Holdings Limited
For Saracen Mineral Holdings Limited, the base or fixed salary for the Managing
Director and other executives for financial year 2018 was $700,000. The maximum STI that the
Executive could receive during the financial year 2018 ranged between 20% and 40% of TFR
and the maximum LTI was 40% of TFR. The TFR consists of base pay and benefits, which
include superannuation. The STI includes cash payments which are a specified target of FR
percentage, while the LTI are mainly composed of performance rights (Macintosh and Quattrone
2010, pp. 77).
Figure 1: SAR's Remuneration Framework of Executive Team

MANAGERIAL ACCOUNTING 4
The following are the three components of the FY2018 executive remuneration
framework of SAR.
Figure 2: Components of SAR's Remuneration framework
b. Newcrest Mining Ltd
For Newcrest Mining Ltd, the Short Term Incentive (STI) outcomes of executives for
during the financial year ending 2017 were kept in the range of fifty-seven percent (57%) to
sixty-nine percent (69%) of their potential maximum allowed. The table below shows the
remunerations awarded to the executive team of Newcrest mining Ltd for the financial year
2017.