b'DIRECTORS REPORT >Long-term incentivesThe LTI program currently consists of restricted shares purchased on market. This plan was adopted in FY17 to replace the former option plan, which was thought to be excessively complex, and could potentially result in significant dilutionof shareholders.The objective of the LTI component is to focus on sustainable shareholder value creation, as expressed through shareThe objective of theprice growth.Under the LTI plan, the Board has actively sought to align LTI component is tosenior executive remuneration with shareholder interests. Shares are purchased on market and held in an employee focus on sustainableshare trust (the Trust). The shares will vest to the employees over the vesting period of three years. The aim of the scheme is to ensure that executives are motivated to think like shareholder valueshareholders, with a focus on taking actions that will lead to sustainable increases in the share price. The structure of the creation, as expressedscheme also ensures that there is no dilution of shareholders.The total annual dollar value of shares to be purchased is through share a maximum of AUD1,000,000. The number of shares to be purchased each year will depend on the share price at the time price growth. that a purchase takes place.The scheme is executed in a similar manner to an on-market buy-back, allowing the Trust to stand in the market and purchase shares at appropriate times. However, the shares will not be cancelled, but will be heldin the Trust, to be distributed to employees over the vesting period of three years.LTI awards are made on an annual basis, subject to achievement of applicable KPIs. This ensures that at any given time, the executives have at risk a number of LTI awards, with different vesting periods and amounts. This helps to smooth out both the risk and the cash flow for the company and for executives.The LTI scheme allows for an award of a maximum of 50% of base salary in the form of restricted shares, subject to achievement of applicable KPIs which are set annually. For FY18, the applicable KPI related to the achievement of the budgeted EBITDA target for the group.During FY19 the Trust did not purchase any shares on market. The applicable KPI was not satisfied, and accordingly no awards of shares were made.24 DONACO INTERNATIONAL LIMITED 2019 ANNUAL REPORT'