This client, an energy sector company, came to GRG for KMP remuneration advice when it was relatively small having a market capitalisation of approximately $140 million. The criteria for selecting the comparator group of companies to be used for benchmarking KMP remuneration was agreed as being a group of 20 companies from the oil and gas sector with half of the companies being larger and half smaller than the client company in terms of market capitalisation. Over a period of four years it grew to a market capitalisation of over $3 billion. Each year GRG undertook market benchmarking of KMP remuneration and applied the same criteria to selection of the comparator group of companies but, of course, the companies in the comparator group changed each year as the client grew.
While the Board was aware of the potential for growth the view was taken that the remuneration packages should be brought into line with relevant market practice each year. This involved substantial increases each year as the company grew. The company did not set pay levels based on expected future growth, they set them by reference to the reality of what had been achieved. KMP realised substantial rewards from their LTI as the company share price climbed.