Remuneration Management

The Board reviews the performance and sets the remuneration package applicable to the Managing Director & Chief Executive Officer following recommendations from the Remuneration Committee.  This performance review involves meeting established performance-based criteria structured on increasing shareholder value.

The Board reviews and evaluates its own 'Board performance' with the guidance of the Nomination Committee.  The process involves consideration of all of the Board's key areas of responsibility and involves a '360 degree feedback' process.  That is, the Board receives feedback from shareholders and executives on the performance of the Board.  During the year, an external independent expert was brought in to review many aspects of the Board's activities and to assist in a continuous improvement process to enhance the effectiveness of the Board. 

The Nomination Committee:

• monitors, reviews and makes recommendations to the Board regarding its performance;
  
  
• monitors, reviews and makes recommendations to the Board as necessary and appropriate regarding the objectives for and assessment of the performance of the Managing Director & Chief Executive Officer;

• reviews and makes recommendations to the Board as appropriate, with regard to:
  • the size and composition of the Board;
  • the criteria for Board membership and desirable qualifications, experience and domicile for individual new appointees to the Board;
  • the induction program for new Directors;
  • continuing education program for Directors; and
  • identification of potential candidates for appointment to the Board.

Total Business Return
Empirical research over the past 15 years shows a strong link between Return on Equity (ROE), Cash Earnings growth and Total Shareholder Return.  Total Business Return (TBR) is a value management tool using the metrics of ROE and Cash Earnings growth to provide an assessment of relative value creation.

TBR has two components:

1. Fundamental Value Growth
This provides an estimate of what the Group or a business is worth based on the underlying financial fundamentals.  The main drivers of Fundamental Value Growth are earnings growth and the related price : earnings multiple (PE)

2. Free Cash Flow Yield
Free cash flows are defined as the earnings that remain after funding the growth in capital required to support the businesses as they grow.  This is an important measure of the extent to which the Group can pay dividends and reinvest for growth and is driven mainly by the Group's ROE.

Download the mathematical representation of TBR.

Download information on NAB's Performance and Talent Management Frameworks.

Download information of  Financial Services Companies Peer Groups

Download information of  Top 50 Companies Peer Groups