Kazia Therapeutics Annual Report 2021

2021 AT A GLANCE CHAIRMAN’S LETTER CEO’S REPORT KEY MILESTONES PIPELINE REVIEW PARTNER FOR SUCCESS WORK WITH THE BEST #2 IN THE KAZIA STORY FINANCIAL REPORTS Kazia Therapeutics Limited Annual Report 2021 29 Consequences of performance on shareholder wealth Shareholder wealth in a company engaged in drug development is generally driven by successful commercialisation, out-licence or sale of a drug candidate, and is a long term proposition, rather than being linked to annual financial performance. The directors have selected a CEO and key management team who, in the directors opinion, are well placed to realise such an outcome for our shareholders. Now that the current CEO and management team have been in place for a number of years, the directors are able to provide the below table showing increase in enterprise value of the Company over the relevant period, with details of bonuses and options awarded each year, to demonstrate the link between performance, reward and increase in shareholder wealth. June 2017 June 2018 June 2019 June 2020 June 2021 Enterprise Value 5,736,560 12,659,955 14,884,643 35,582,939 145,349,234 Total bonuses paid to KMP 191,135 - 125,400 212,500 356,400 Number of bonus participants 5 - 3 3 6 Share options issued to KMP 450,000 362,000 100,000 1,300,000 2,100,000 Number of KMP granted options 2 2 2 3 6 Enterprise Value of the Company has been calculated as the market capitalisation of the Company at each period end, adjusted for cash held at year end, and the for anticipated R&D cash rebate (deemed to be essentially cash). The use of Enterprise Value seeks to represent the underlying value of the business after adjusting for cash or debt balances. Voting and comments made at the consolidated entity’s last Annual General Meeting The consolidated entity received 93.63% of “yes” votes on its Remuneration Report for the financial year ending 30 June 2020. The consolidated entity received no specific feedback on its Remuneration Report at the Annual General Meeting. Bonuses included in remuneration Details of short term incentive cash bonuses awarded as remuneration to each key management personnel are included in the above tables. Service agreements Under Remuneration and Nomination Committee policy, employment contracts are entered into with each of the executives who is considered to be KMP. Under the terms of the contracts, remuneration is reviewed at least annually. The employment contracts of KMPs include a termination clause whereby a party can terminate the agreement on notice. Such notice may vary between 4 weeks and 6 months. Under the terms of each contract, payment in lieu can be made by the consolidated entity to substitute the notice period. The consolidated entity may terminate the contracts at any time without cause if serious misconduct has occurred. In the event that employment is terminated for cause, no severance pay or other benefits are payable by the consolidated entity. Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: James Garner Title: Chief Executive Officer, Managing Director Agreement commenced: 1 February 2016 Term of agreement: Full-time employment Details: Base salary to be reviewed annually by the Remuneration and Nomination Committee. James’s appointment with the consolidated entity may be terminated with the consolidated entity giving 6 months’ notice or by James giving 6 months’ notice. The consolidated entity may elect to pay James equal amount to that proportion of his salary equivalent 6 months’ pay in lieu of notice, together with any outstanding entitlements due to him. The current base salary, as from 1 January 2021, is $510,000 including an allowance for health benefits. Name: Gabrielle Heaton Title: Director of Finance and Administration Agreement commenced: 13 March 2017 Term of agreement: Full time employment Details: Base salary to be reviewed annually by the Remuneration and Nomination Committee. Gabrielle’s appointment with the consolidated entity may be terminated with the consolidated entity giving 4 weeks’ notice or by Gabrielle giving 4 weeks’ notice. The consolidated entity may elect to pay Gabrielle equal amount to that proportion of her salary equivalent 4 weeks’ pay in lieu of notice, together with any outstanding entitlements due to her. The current base salary, from 1 January 2021, is $208,000.