REMUNERATION REPORT Continued 3. REMUNERATION STRATEGY The remuneration strategy defines the direction for Myer’s reward framework and policies, and drives the design and application of programs for all senior managers in the Company, including KMP. Myer’s remuneration strategy is to: Attract and retain high calibre executives • Reward competitively in the markets in which Myer competes for talent • Remuneration is flexible enough to respond to the changing talent and capability requirements of the retail industry • Provide a balance of fixed and ‘at risk’ remuneration Align executive rewards with Myer’s performance • Align reward outcomes with long term shareholder value creation • Assess rewards against objective financial and non-financial measures • Include at risk components based on both short and long term performance • Remunerate or reward based on performance 2018 Remuneration Approach STRATEGIC OBJECTIVES & PERFORMANCE PERFORMANCE MEASURES LINK > To attract and retain high calibre executives > Varies based on employee’s experience, skills TOTAL FIXED > Provides ‘predictable’ base level of reward and performance COMPENSATION Set with reference to market using external > Consideration is given to both internal and (TFC) > benchmark data external relativities across retail and other relevant sectors > Delivered in cash, with a portion deferred. > NPAT ‘gateway’ –minimum threshold Deferral is made in restricted shares for the performance level below which no STI is paid CEO (when eligible) and cash for other KMP > Once thegateway is achieved, the NPAT > Designed to drive the short term financial and result is assessed as part of a ‘performance strategic objectives of the Company, which are scorecard' and accounts for 45% of the aligned to creatingshareholder return maximum STI SHORT TERM > An NPAT gateway ensures a minimum > Key financial and strategic objectives aligned INCENTIVE acceptable level of Company profit before to the strategy account for 55% of the executives receive any STI award maximum STI. Measures for FY2018 > Supports retention and encourages executives included: to maintain focus on long term value in addition • Cost of doing business to annual results, through a deferred • Sales per square meter component • Store footprint reduction • Safety performance > Delivered in equity to align executives with > Performance measures: shareholder interests • Return on Funds Employed (50% of > Focused on delivery of long term business award) strategy and shareholder value • EPS growth (25% of award) LONG TERM > Measures complement those in the STI to Relative TSR (25% of award) INCENTIVE • provide a holistic and aligned reward offer > Performance measured over a 3 year > Supports ongoing, sustainable performance performance period (FY2018 –FY2020) and the retention of key executives > Shares provided on vesting subject to restriction for 1 year, making the total alignment period with shareholders 4 years 28 Myer Annual Report 2018