Valoración de vulnerabilidad y nivel de riesgo

Policy and approach to setting remuneration

TWE’s remuneration policies and practices are benchmarked using information and advice from external, independent consultants. In general, the Company sets remuneration levels against a combination of global corporations across all industries, FMCG/tobacco and beverage companies (where there is sufficient market depth) and specialised wine/spirit companies (where data is available) in countries where the Company operates.

The objective of the Company’s Remuneration Policy is that remuneration levels properly reflect the duties and responsibilities of the executives. For fixed remuneration, the policy aims to deliver around market median.

In determining Nominated Executives’ remuneration for the remaining portion of the 2011 financial year (FY11) following the demerger and for the 2012 financial year (FY12), the following benchmarking process was undertaken:

• the Chief Executive Officer role was independently ‘sized’ and the appropriate remuneration benchmarked by the Hay

Group utilising their market data;

• all Nominated Executive roles were independently ‘sized’ and the appropriate remuneration benchmarked by the Hay

Group utilising their market data. The remuneration for these Nominated Executive roles were then compared to roles of similar ‘size’ and roles with similar functions utilising Hay market data to ensure appropriateness; and

• remuneration of the CEO and Nominated Executives in ASX listed organisations with market capitalisation marginally

less than/greater than that of TWE were selected and analysed for validation of the above results.

When taking into account variable (‘at risk’) remuneration, the intention is to deliver around market median for target levels of performance. For superior performance, the Company aims to deliver rewards around the 75th percentile of benchmarked companies. The Board also considers it important that key employees have ongoing share ownership in the Company and thus all variable risk components incorporate some level of share ownership into the benefit delivered. In line with TWE’s Policy, these remuneration levels and arrangements will be reviewed annually to ensure alignment to the market and the Company’s stated objectives.

Remuneration structure

Remuneration packages are structured to ensure that a significant part of an executive’s reward depends on achieving business objectives and realising benefits for shareholders. Accordingly, the proportion of remuneration that is ‘at risk’ (being the short and long term incentive elements) increases for more senior positions. The structure and relative proportion of each element is held as consistent as practicable on a global basis, with exceptions made to cater to markets where local practice places greater emphasis on certain elements.

The actual remuneration mix for Nominated Executives will vary depending on the level of performance achieved at an organisational, business unit and individual level.

Diagram 2.1 shows the annual remuneration mix (at stretch performance) for Nominated Executives which applied from demerger.

Diagram 2.1: Remuneration mix for Nominated Executives post demerger

Nominated Executive Annual Fixed Remuneration Remuneration Mix DCM Dearie

Chief Executive Officer

$1,350,000

M Fleming

Chief Financial Officer

$720,000 S Brauer1

Managing Director: Americas

$498,380 PR Jackson2

Managing Director: EMEA

$395,855 AN Davie

Managing Director: Asia

$461,310 B Williams

Chief Human Resources Officer

$468,000 PD Conroy

General Counsel and Co Secretary

$514,800

1. S Brauer is remunerated in USD. His annual fixed remuneration has been converted to AUD utilising an annual averaged FX rate of 1.0196. 2. PR Jackson is remunerated in GBP. His annual fixed remuneration has been converted to AUD utilising an annual averaged FX rate of 1.6197.

Fixed rumuneration 22% Short term incentive

(stretch opportunity) 33% Long term incentive

(maximum opportunity) 45% Substantial portion of remuneration linked directly to the achievement of annual business (predominantly) and individual performance

Bulk of remuneration linked to driving long term performance and shareholder wealth creation

Fixed rumuneration 24% Short term incentive

(stretch opportunity) 38% Long term incentive

(maximum opportunity) 38% Substantial portion of remuneration linked directly to the achievement of annual business (predominantly) and individual performance

Bulk of remuneration linked to driving long term performance and shareholder wealth creation

Fixed rumuneration 22% Short term incentive

(stretch opportunity) 33% Long term incentive

(maximum opportunity) 45% Substantial portion of remuneration linked directly to the achievement of annual business (predominantly) and individual performance

Bulk of remuneration linked to driving long term performance and shareholder wealth creation

Fixed rumuneration 24% Short term incentive

(stretch opportunity) 38% Long term incentive

(maximum opportunity) 38% Substantial portion of remuneration linked directly to the achievement of annual business (predominantly) and individual performance

Bulk of remuneration linked to driving long term performance and shareholder wealth creation

To ensure the variable components of the Company’s remuneration structure remain at risk, employees may not hedge against the risk inherent in arrangements such as the long term incentive or any other share-based incentive plans. Awards will be forfeited if the policy is breached.

A. Fixed remuneration

All Nominated Executives receive a fixed remuneration component as per their employment contract. In general, fixed remuneration is set by reference to:

• the market median for comparable organisations (global organisations across all industries, FMCG/tobacco and

beverage companies (where there is sufficient market depth) and specialised wine/spirits companies (where data is available) in countries where the Company operates);

• the scope of the role; and

• the level of knowledge, skills and experience required of the individual.

Nominated Executives’ fixed remuneration is structured as:

• Total Remuneration (for Australian based executives) – inclusive of elected packaged benefits (e.g. motor vehicle leasing arrangements, car parking, additional superannuation contributions). The sum of elected packaged benefits, cash salary and mandatory superannuation contributions comprise Total Remuneration. Nominated Executives may also receive non-monetary benefits in addition to their stated Total Remuneration (e.g. wine allocations, event tickets, Fringe Benefits Tax, etc.); or

• Base salary plus benefits consistent with local market competitive practice (for executives based outside Australia) – which may vary by country. Reference to ‘fixed remuneration’ in this Report refers to the base salary component for these Nominated Executives.

In general, the level of fixed remuneration will be reviewed by the Human Resources Committee annually and at any other times as determined by the Board. The Human Resources Committee will review the remuneration of the Chief Executive Officer annually and make appropriate recommendation to the Board.

The Chief Executive Officer, in conjunction with the Human Resources Committee, will review the remuneration of his direct reports and make appropriate recommendation to the Board. The TWE leadership team will review all employee remuneration arrangements annually.

Nominated Executive fixed remuneration was evaluated, benchmarked and adjusted (where appropriate) upon demerger in line with the Company’s Remuneration Policy. As such there will be no increase in Nominated Executives’ remuneration for FY12.

B. At risk remuneration – short term incentive (STI)

I. Overview, policy and operation

The short term incentive (TWE STI) to be offered by the Company in FY12 has been redesigned to align with the strategic focus of the business to incentivise the Company’s management to realise the benefits of the demerger. The TWE STI is designed to encourage the delivery of specific financial goals and desired behaviours; balance reward, individual effort and Company performance; and ensure simplicity and affordability. To further align executive remuneration with shareholder interests, one third (or such other portion as determined by the Board) of any incentive that vests is delivered as Restricted Shares. The balance of any vested award is delivered as cash.

The Board has approved a short term incentive structure for FY12 that encourages