The Board believes remuneration policies are a key part of ensuring this success. The Board has a Remuneration Committee, which consists of only independent non-executive directors, has at least three members and is chaired by an independent director as suggested in Recommendation 8.1. The Committee met once during 2023. The Committee operates under a charter approved by the Board, a summary of which is available on the Neuren website. It is responsible for undertaking a broad review of, ensuring compliance with, and making recommendations in respect of, the Group’s remuneration policies. It is also responsible for: – setting and reviewing compensation policies and practices of the Company; – setting and reviewing all elements of remuneration of the directors and members of the executive team; and – setting and reviewing long term incentive plans for employees and/or directors. In undertaking these tasks the Remuneration Committee meets separately with management where required. The Group’s remuneration policies and practices are summarised below, in accordance with Recommendation 8.2. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of executive directors and senior executives on a regular basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality executive team. To assist in achieving these objectives, the nature and amount of executive remuneration is linked to the Company’s performance. Remuneration consists of fixed cash remuneration, including superannuation contributions required by law, and equity-based remuneration. Fixed cash remuneration takes into account labour market conditions, as well as the scale and nature of the Group’s business. Equity-based remuneration is provided by participation in a share option plan and/or a loan funded share plan. These are designed to ensure that key executives are aligned with shareholders through an interest in the long-term growth and value of the Company. Senior executive service agreements generally include a requirement for 3 months’ notice of termination by the executive or the Group. There are no other termination payments. Termination for misconduct does not require notice or payment. The Group does not operate a short-term incentive plan, however discretionary bonuses may be approved to recognise exceptional achievement. Discretionary bonuses were approved in 2023, the amount of which took into account the value of the critical milestones achieved during the year in each of the three value drivers of the business. CORPORATE GOVERNANCE CONTINUED Remuneration of non-executive directors comprises fixed cash fees only. The fees are determined by the Board within the aggregate limit for directors’ fees approved by shareholders. Non-executive directors on payroll receive retirement benefits as part of their fixed fee. All other nonexecutive directors receive no retirement benefits. Participants in equity based remuneration schemes are not permitted to enter into transactions which limit the economic risk of participating in the scheme (Recommendation 8.3). PRINCIPLE 9. ADDITIONAL RECOMMENDATIONS Neuren is incorporated in New Zealand and ensures meetings of security holders are held at a reasonable place and time (Recommendation 9.2). Since Neuren is incorporated in New Zealand and applies New Zealand financial reporting standards, its auditor is located in New Zealand. The Board has considered it impractical and an unnecessary expense for the auditor to travel to Australia to attend the annual general meeting in person, as suggested in Recommendation 9.3. The Company’s constitution enables the Board to convene virtual shareholder meetings, with participation by electronic means. ENVIRONMENTAL AND SOCIAL IMPACT Neuren’s small workforce of 24 people all work from home and no office or other facility is maintained. The incremental environmental impact is therefore negligible. Pharmaceutical development for international markets necessarily requires some domestic and long-haul plane travel for some people. However, the improved technology and increased use of video meeting applications has enabled the frequency to be reduced. The necessity of any plane travel is always considered carefully before approval. Neuren’s work to develop treatments for serious neurodevelopmental disorders that have no approved medicines and have a devastating impact on families has a very high positive social impact, which is also highly motivating for Neuren’s workforce. Neuren works closely with the patient communities for each of the disorders and provides financial support to events organised by patient advocacy organisations. Neuren aims to provide a positive and productive work environment for its workforce. Working from home provides people with high flexibility and enables optimum work/life balance. The small size of the team facilitates opportunities to experience and take responsibility for a broader range of activities. Staff turnover was zero in 2023. Neuren Pharmaceuticals Limited Annual Report 2023 29
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