A Practical Guide to Preparing KMP Remuneration Disclosures for the Annual Report

Preparing KMP remuneration disclosures for the annual report is one of the most detail-heavy parts of listed company reporting.

It brings together payroll data, board approvals, executive contracts, incentive outcomes, equity grants, share-based payment expenses, director fees, termination arrangements, related party information, remuneration consultant disclosures and the board’s explanation of pay-for-performance.

The challenge is not only producing the numbers.

The real challenge is producing disclosures that are accurate, complete, consistent, understandable and defensible.

For an ASX-listed company, the remuneration report is not just a compliance section. It is one of the clearest windows into how the board governs executive pay, board fees and performance outcomes. Investors, proxy advisers, employees, auditors and regulators may all read it closely.

The practical objective is simple:

Turn KMP remuneration records into a clear annual report disclosure that explains who was paid, what they were paid, why they were paid, and how the outcome aligns with company performance.

1. Start early, not when the annual report is due

KMP remuneration disclosure should not start after year end. By then, the team is already under pressure from audit timelines, board reviews, financial statement sign-off and annual report production deadlines.

The best approach is to start preparing during the reporting year.

At least three months before year end, create a remuneration report preparation plan covering:

• KMP list and service periods;
• payroll data requirements;
• board fee records;
• STI and LTI outcomes;
• equity grants, vesting and lapses;
• share-based payment expense;
• executive contract terms;
• termination arrangements;
• related party information;
• remuneration consultant disclosures;
• board and committee approvals;
• annual report drafting responsibilities;
• audit review timing; and
• board and Remuneration Committee review dates.

The earlier the process starts, the easier it is to resolve missing documents, inconsistent dates and unclear approvals.

2. Confirm the KMP population first

The first disclosure question is not “what were they paid?”

It is:

Who needs to be disclosed?

The KMP population should be confirmed before remuneration tables are prepared.

This should include:

• current directors;
• former directors who served during the year;
• executive directors;
• CEO or Managing Director;
• CFO;
• other executive KMP;
• interim or acting KMP;
• former executive KMP who served during part of the year; and
• any judgement cases assessed during the year.

For each KMP, confirm:

• full name;
• role title;
• current or former status;
• executive or non-executive status;
• date appointed as KMP;
• date ceased as KMP, if applicable;
• role changes during the year; and
• whether remuneration should be disclosed for the full year or part year.

Practical KMP disclosure table

Name	Role	Category	KMP period during year	Disclosure note
Jane Smith	Chair	Non-executive director	Full year	Director fees disclosed for full year
Mark Lee	Managing Director and CEO	Executive KMP	Full year	Full executive remuneration disclosure
Priya Rao	CFO	Executive KMP	From 1 October	Part-year remuneration disclosure
David Chen	Former CFO	Former executive KMP	To 30 September	Disclosure to cessation date
Alex Green	COO	Executive KMP	Full year	Included due to enterprise operating responsibility

This table should be agreed by Finance, Legal, Company Secretariat, HR and Reward before drafting begins.

3. Create a disclosure data request pack

The remuneration report draws data from multiple functions. A structured data request pack prevents gaps.

From Payroll

Request:

• salary and fees paid;
• cash bonuses paid;
• superannuation;
• allowances;
• leave payments;
• non-monetary benefits;
• termination payments;
• reimbursements;
• payroll codes;
• payment dates;
• part-year service periods; and
• any unusual or manual payments.

From Finance

Request:

• share-based payment expense;
• accruals;
• accounting classifications;
• fair value calculations;
• general ledger reconciliations;
• treatment of bonuses accrued but not yet paid;
• treatment of termination benefits;
• audit support schedules; and
• prior-year comparative data.

From HR and Reward

Request:

• fixed remuneration rates;
• STI opportunities;
• STI performance measures;
• STI outcomes;
• LTI grants;
• LTI vesting outcomes;
• plan rules;
• employment contract summaries;
• termination terms;
• sign-on or retention awards;
• remuneration benchmarking outcomes; and
• board-approved remuneration changes.

From Company Secretariat

Request:

• director appointment and resignation dates;
• board and committee fee records;
• board and committee approvals;
• director equity holdings;
• executive equity holdings;
• Appendix 3Y records where applicable;
• fee pool usage;
• AGM outcomes;
• shareholder feedback;
• remuneration report voting history;
• remuneration consultant engagement records; and
• committee minutes.

From Legal

Request:

• contract terms;
• separation deeds;
• related party matters;
• shareholder approval requirements;
• remuneration consultant independence arrangements;
• disclosure review comments;
• unusual payment review; and
• risk assessment for sensitive disclosures.

A good data request pack turns annual report preparation from a chase into a controlled workflow.

4. Build the remuneration disclosure workbook

Before writing the narrative, build the numbers.

A central remuneration disclosure workbook should include:

• KMP register;
• statutory remuneration table;
• actual or realised remuneration table, if used;
• fixed remuneration movement table;
• STI opportunity and outcome table;
• LTI grant table;
• LTI vesting and lapse table;
• equity holding movement table;
• board fee table;
• director fee pool tracker;
• contract terms table;
• termination payment table;
• remuneration consultant disclosure table;
• related party disclosure checklist; and
• reconciliation summary.

Each number should have a source reference.

The workbook should not be a rough working file that only one person understands. It should be structured so Finance, Company Secretariat, Legal, Reward, auditors and the annual report drafting team can all follow the logic.

5. Reconcile before drafting

One of the most common mistakes is drafting the remuneration report before the data is reconciled.

This creates rework because the narrative, tables and explanations must be amended every time numbers change.

Before drafting the final disclosure, reconcile:

• KMP list to board and executive appointment records;
• salary and fees to payroll;
• director fees to fee pool records;
• bonuses to board approvals;
• STI outcomes to scorecards;
• LTI grants to plan records;
• LTI vesting to performance testing;
• share-based payment expense to Finance calculations;
• equity holdings to registry and plan administrator records;
• termination payments to separation agreements;
• contract terms to signed contracts;
• remuneration consultant fees to invoices and engagement letters;
• related party items to KMP confirmations; and
• prior-year comparatives to the previous annual report.

A practical rule:

Do not draft from numbers that have not been reconciled.

6. Prepare the statutory remuneration table carefully

The statutory remuneration table is usually the most technical table in the remuneration report.

It may include categories such as:

• short-term employee benefits;
• salary and fees;
• cash bonuses;
• non-monetary benefits;
• post-employment benefits;
• superannuation;
• other long-term benefits;
• leave benefits;
• termination benefits;
• share-based payments; and
• total remuneration.

Practical statutory remuneration table

Name	Salary/fees	Cash bonus	Non-monetary benefits	Superannuation	Long-term benefits	Termination benefits	Share-based payments	Total
CEO	$X	$X	$X	$X	$X	$X	$X	$X
CFO	$X	$X	$X	$X	$X	$X	$X	$X
COO	$X	$X	$X	$X	$X	$X	$X	$X
Chair	$X	-	-	$X	-	-	-	$X
Director A	$X	-	-	$X	-	-	-	$X

Practical checks

Ask:

• Are part-year KMP disclosed only for the relevant period?
• Are former KMP included where required?
• Are cash bonuses shown in the correct year?
• Are share-based payments shown as accounting expense?
• Are termination benefits separately disclosed?
• Are non-monetary benefits captured?
• Does superannuation reconcile to payroll records?
• Are director fees separated from executive remuneration?
• Do totals add correctly?
• Do prior-year comparatives match the prior annual report?

This table should be reviewed by Finance, Payroll, HR/Reward and the auditors.

7. Explain remuneration policy in plain English

The remuneration report should explain the company’s remuneration policy clearly.

Avoid generic language such as:

“The company aims to provide competitive remuneration to attract and retain high-calibre executives.”

That may be true, but it does not tell shareholders much.

Better wording explains:

• what the company is trying to reward;
• how fixed pay is positioned;
• how STI works;
• how LTI works;
• how performance is measured;
• how risk is considered;
• how shareholder alignment is created; and
• how board discretion is used.

Practical policy wording

The executive remuneration framework is designed to attract and retain executives with the skills required to deliver the Company’s strategy, while linking a meaningful portion of remuneration to performance. Fixed remuneration reflects role scope, capability and market competitiveness. STI rewards annual financial, strategic and risk outcomes. LTI is delivered through equity and is intended to align executives with long-term shareholder value creation.

This gives readers a clear overview before they reach the detailed tables.

8. Show how pay links to performance

Shareholders want to understand whether remuneration outcomes were earned.

The annual report should show the link between:

• company performance;
• STI outcomes;
• LTI vesting;
• board discretion; and
• shareholder experience.

A practical performance table may include:

Measure	FY2026 result	Impact on remuneration
Revenue	$X	Above target; contributed to STI outcome
EBITDA	$X	At target; supported partial STI payout
Cash flow	$X	Below target; moderated STI outcome
Safety	X	Below threshold; downward discretion applied
Relative TSR	X percentile	Drove partial LTI vesting
EPS growth	X%	Below target; relevant LTI tranche lapsed

This is much stronger than saying “remuneration was aligned with performance” without evidence.

9. Explain STI design and outcome

The STI section should explain both the opportunity and the actual outcome.

Include:

• eligible KMP;
• target and maximum opportunity;
• performance measures;
• weightings;
• threshold, target and stretch levels, where appropriate;
• actual results;
• formulaic outcome;
• board discretion;
• final outcome;
• cash and deferred components; and
• malus or clawback provisions.

Practical STI outcome table

Measure	Weighting	Target	Actual	Outcome
EBITDA	40%	$X	$X	Above target
Revenue growth	20%	X%	X%	Below target
Safety	20%	X	X	Below threshold
Strategic milestones	20%	Board assessment	Partly achieved	Partial payout

Practical executive STI table

Executive	Maximum STI opportunity	STI awarded	% of maximum	Delivery
CEO	$X	$X	X%	50% cash, 50% deferred equity
CFO	$X	$X	X%	Cash
COO	$X	$X	X%	Cash

Practical wording

The Board considered the formulaic STI outcome and applied downward discretion to reflect safety performance below expectations. As a result, the final STI pool was reduced from X% to Y% of maximum opportunity.

This explanation helps investors understand both the calculation and the judgement.

10. Explain LTI grants and vesting

The LTI section should explain what was granted, what vested, what lapsed and why.

Include:

• grant date;
• instrument type;
• number of rights or options;
• face value or fair value;
• performance period;
• performance conditions;
• testing date;
• vesting scale;
• actual outcome;
• lapses;
• treatment on cessation;
• malus and clawback;
• whether shareholder approval was obtained, if relevant.

Practical LTI vesting table

Grant	Performance period	Measure	Weighting	Actual outcome	Vesting outcome
FY2024 LTI	1 July 2023 to 30 June 2026	Relative TSR	50%	60th percentile	50% vesting of tranche
FY2024 LTI	1 July 2023 to 30 June 2026	EPS CAGR	50%	Below threshold	0% vesting of tranche
Total			100%		25% total vesting

Practical wording

The FY2024 LTI grant was tested after the end of the performance period. Based on relative TSR performance at the 60th percentile and EPS growth below threshold, 25% of the award vested and 75% lapsed.

This is clear, factual and easy to follow.

11. Prepare equity movement disclosures

Equity disclosures are often difficult because information may sit across multiple systems.

The annual report may need to disclose movements in:

• ordinary shares;
• performance rights;
• options;
• deferred shares;
• restricted shares;
• vested but unexercised awards;
• related party holdings, where relevant.

Reconcile movements to the share registry, equity plan administrator, board approvals, grant letters and Appendix 3Y filings where applicable.

Practical equity movement table

Name	Instrument	Opening balance	Granted	Vested/exercised	Lapsed/forfeited	Purchased/sold	Closing balance
CEO	Ordinary shares	X	-	X	-	X	X
CEO	Performance rights	X	X	X	X	-	X
CFO	Performance rights	-	X	-	-	-	X

This table should be checked carefully because equity errors can be highly visible.

12. Disclose executive contract terms

Executive service agreements should be summarised clearly.

Include:

• contract type;
• commencement date;
• notice period by executive;
• notice period by company;
• termination payment arrangements;
• restraint provisions, where relevant;
• STI and LTI treatment on cessation; and
• any special terms.

Practical contract terms table

Executive	Contract type	Notice by executive	Notice by company	Termination provisions
CEO	Ongoing	6 months	6 months	Up to 6 months fixed remuneration, subject to law
CFO	Ongoing	3 months	6 months	Up to 6 months fixed remuneration, subject to law
COO	Ongoing	3 months	3 months	Up to 3 months fixed remuneration, subject to law

Avoid long legal paragraphs where a simple table would be clearer.

13. Disclose non-executive director remuneration separately

Board member remuneration should be clearly separated from executive remuneration.

For non-executive directors, disclose:

• board Chair fee;
• base director fee;
• committee Chair fees;
• committee member fees;
• superannuation;
• any special fees;
• whether fees changed during the year;
• approved fee pool;
• actual fee pool usage; and
• whether directors receive performance-based remuneration.

Practical board fee table

Role	Annual fee
Board Chair	$X
Non-executive Director	$X
Audit and Risk Committee Chair	$X
Audit and Risk Committee Member	$X
Remuneration Committee Chair	$X
Remuneration Committee Member	$X

Practical wording

Non-executive directors receive fixed fees for board and committee responsibilities. They do not receive performance-based remuneration, options or incentive awards, in order to preserve independence.

This distinction is important for governance readability.

14. Capture unusual payments clearly

Unusual payments should be identified early and disclosed carefully.

These may include:

• sign-on bonuses;
• make-whole awards;
• retention grants;
• relocation payments;
• termination benefits;
• separation payments;
• consulting arrangements;
• special project fees;
• accelerated vesting;
• discretionary bonuses;
• settlement payments;
• director-related entity payments; and
• one-off allowances.

Do not hide material items in “other benefits.”

If a shareholder would reasonably want to understand it, explain it.

Practical wording

During the year, the Company made a one-off sign-on payment of $X to the CFO to compensate for incentives forfeited with their previous employer. The payment was approved by the Board at the time of appointment and is not part of the CFO’s ongoing remuneration arrangement.

Clear explanation reduces suspicion.

15. Address remuneration consultant disclosures

If remuneration consultants were used, confirm the nature of the engagement.

The disclosure may need to explain:

• who the consultant was;
• who engaged the consultant;
• whether a remuneration recommendation was provided;
• fees for the recommendation;
• fees for other services;
• independence safeguards;
• whether management was involved;
• board statement about undue influence; and
• how the advice was used.

Practical consultant disclosure table

Consultant	Services provided	Remuneration recommendation?	Fees for recommendation	Other fees
XYZ Advisory	Executive remuneration benchmarking	Yes	$X	$X
ABC Data	Market survey data	No	-	$X

The key is to distinguish formal remuneration recommendations from general market data.

16. Explain any shareholder strike or feedback response

If the company received a significant vote against the prior remuneration report, the annual report should explain how the board responded.

Include:

• prior year vote result;
• whether it was a first or second strike;
• key shareholder concerns;
• engagement undertaken;
• changes made;
• issues not changed and why; and
• future actions.

Practical wording

At the 2025 AGM, X% of votes were cast against the adoption of the remuneration report. Following the AGM, the Board engaged with shareholders and proxy advisers to understand their concerns. In response, the Board increased disclosure of STI performance outcomes, simplified the LTI framework and introduced a risk gateway for future incentive awards.

This shows that the board listened and acted.

17. Prepare the Chair or Committee Chair letter last

The opening letter should be drafted after the data and outcomes are known.

It should summarise:

• business performance;
• remuneration outcomes;
• STI and LTI results;
• board discretion;
• key changes during the year;
• shareholder feedback;
• changes for next year; and
• the board’s view on alignment.

Practical opening summary

During FY2026, the Company delivered revenue growth of X% and underlying EBITDA of $X. However, cash flow and safety outcomes were below expectations. Reflecting this mixed performance, the Board applied downward discretion to reduce STI outcomes. The FY2024 LTI grant partially vested based on relative TSR performance, while the EPS tranche lapsed. The Board considers the final remuneration outcomes to be aligned with Company performance and shareholder experience.

This kind of opening helps readers understand the remuneration story quickly.

18. Manage the review process carefully

KMP remuneration disclosures should go through multiple levels of review.

Suggested review sequence:

1. HR/Reward prepares remuneration framework and incentive sections.
2. Payroll confirms cash remuneration and benefits.
3. Finance confirms accounting treatment and share-based payments.
4. Company Secretariat confirms KMP list, approvals, board fees and equity holdings.
5. Legal reviews disclosure, contracts and unusual arrangements.
6. Auditors review numbers and supporting evidence.
7. Remuneration Committee reviews the draft report.
8. Board approves the final annual report.

Each reviewer should know what they are responsible for checking.

19. Keep a disclosure evidence file

Every material disclosure should be supported by evidence.

Create a file containing:

• KMP register;
• payroll reports;
• STI calculations;
• LTI calculations;
• board approvals;
• Remuneration Committee minutes;
• employment contracts;
• separation agreements;
• equity grant letters;
• share registry reports;
• share-based payment calculations;
• consultant engagement letters;
• consultant invoices;
• related party confirmations;
• annual report disclosure checklist;
• audit queries and responses; and
• final sign-offs.

A practical standard is:

Every number in the remuneration report should be traceable to a source document.

20. Use a final disclosure checklist

Before finalising the remuneration report, check:

KMP list

• Have all current and former KMP been included?
• Are start and end dates correct?
• Are part-year disclosures accurate?
• Are executive and non-executive KMP separated?

Remuneration tables

• Do payroll amounts reconcile?
• Are bonuses shown correctly?
• Are share-based payment expenses correct?
• Are termination benefits separately disclosed?
• Are totals checked?
• Are prior-year comparatives correct?

Incentives

• Are STI measures and outcomes explained?
• Are LTI grants and vesting outcomes explained?
• Is board discretion disclosed clearly?
• Are malus and clawback provisions addressed where relevant?

Equity

• Do opening and closing balances reconcile?
• Are grants, exercises, lapses and forfeitures correct?
• Are director and executive holdings checked?

Contracts and consultants

• Are service agreement terms current?
• Are termination provisions accurate?
• Are remuneration consultant disclosures complete?
• Are unusual payments explained?

Governance and readability

• Does the report explain pay-for-performance clearly?
• Is shareholder experience considered?
• Is the Chair or Committee Chair summary consistent with the tables?
• Are shareholder feedback and strike responses addressed?
• Can a reasonable shareholder understand the outcome?

21. Common mistakes to avoid

Do not start annual report drafting before the KMP list is confirmed.

Do not rely on payroll alone for remuneration data.

Do not forget former or part-year KMP.

Do not mix statutory remuneration with realised remuneration.

Do not confuse grant value, fair value, accounting expense and vested value.

Do not hide one-off payments in broad categories.

Do not disclose incentive outcomes without explaining performance.

Do not forget director fee pool usage.

Do not leave equity reconciliations until the last minute.

Do not let the narrative say “alignment” if the numbers suggest otherwise.

Do not skip legal and audit review on sensitive items.

22. What good support looks like

Good support for KMP remuneration disclosures means the annual report team can answer:

• Who is included?
• Why are they included?
• What period are they disclosed for?
• What were they paid?
• What was granted?
• What vested?
• What lapsed?
• What was approved?
• What was discretionary?
• What was unusual?
• How does the outcome align with performance?
• Where is the supporting evidence?

When these answers are clear, the annual report process becomes smoother and the final disclosure is more credible.

Final thought

Preparing KMP remuneration disclosures is more than table preparation.

It is the process of translating remuneration governance into public disclosure.

The numbers must be right, but the story must also be clear. Shareholders should be able to understand who was paid, what they were paid, why they were paid and whether the outcome reflects company performance and shareholder value.

The strongest annual report disclosures are built on disciplined preparation:

Confirm the KMP list. Reconcile the data. Explain the outcomes. Evidence every number. Tell the remuneration story clearly.

That is how KMP remuneration disclosure becomes more than compliance. It becomes a demonstration of good governance.