b'DIRECTORS REPORT >EXECUTIVE SUMMARYDonaco uses a simple framework for executive remuneration, consisting of three elements:1.Fixed remuneration: consisting of base salary, superannuation and non-monetary benefits (if any).2.Short-term incentives (STI): which are paid in cash, but only if executives satisfy applicable key performance indicators (KPIs).3.Long-term incentives (LTI): under which executives may receive annual grants of restricted shares purchased on market, but only if applicable KPIs are satisfied. The shares vest overa three-year period.For STI in FY19, the following KPIs applied:1.Achievement of the budgeted EBITDA target for the group (30%).2.Achievement of the budgeted revenue target for the Star Vegas property, in Thai Baht terms (25%).3.Achievement of the budgeted revenue target for the Aristo property, in Chinese Renminbi terms (25%).4.Achievement of a personal KPI relating to the executives individual areas of responsibility (20%).The first three KPIs were not satisfied. Two executives did satisfy or partially satisfy their personal KPI, and thus are entitled to be paid up to 20% of their potential incentive. Accordingly, two executives forfeited 80% to 90%, and the others forfeited 100%, of their potential incentive.For LTI in FY19, the following KPI was required to be satisfied:1. Achievement of the budgeted EBITDA target for the group.This KPI was not satisfied, and accordingly no LTI were awarded.Shareholders should note that share price movements per se are not an applicable KPI. Share prices are affected by many factors beyond the control of management. However all of the applicable KPIs should, if achieved, have a positive impact on Donacos performance, which would normally be reflected in the share price, subject to any external factors. Accordingly, the remuneration framework focuses executives on matters that they can control, which are expected to provide benefits to shareholders through a higher share price.In addition, the award of restricted shares under the LTI plan aligns the interests of executives with shareholders. Executives benefit directly if the share price increases, and also suffer directly if the share prices decreases.PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATIONIntroductionThe performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy is to attract and retain high quality personnel, and motivate themto achieve high performance.The objective of the consolidated entitys executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward.20 DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT'