Good morning, everyone. My name's Rob Cole, and I'm the Chair of Perenti. It's now 11:00 A.M., Perth time, and I welcome all shareholders to the company's 2023 annual general meeting, both here in person and online through the virtual meeting platform provided by our share registry, Link Market Services Limited. If we experience any technical issues today, a short recess or an adjournment may be required, depending on the number of shareholders affected. If this occurs, I'll advise accordingly. As we have a quorum present, I now declare the annual general meeting open. I start by acknowledging the traditional custodians of the various lands from which we meet today, including the Whadjuk people.
We also acknowledge the Aboriginal and Torres Strait Islander people participating in this meeting, and I pay my respects to elders past, present, and emerging, and recognize and celebrate the diversity of Aboriginal peoples and their ongoing cultures and connections to the lands and waters of Australia. I'm joined at the meeting today by Mark Norwell, our Managing Director and CEO, Mark Hine, an independent non-executive director and Chair of the People and Remuneration Committee, Alex Atkins, an independent non-executive director, Andrea Hall, an independent non-executive director and Chair of the Audit and Risk Committee, Tim Longstaff, an independent non-executive director and Chair of the Safety and Sustainability Committee, and Craig Laslett, an independent non-executive director.
I'd also like to acknowledge the presence of Andrea Sutton, who joins us in the audience here today, and Diane Smith-Gander, who joins us online, both of whom will join the Perenti board next week following the recent implementation of the DDH1 transaction. I'm also joined by our group executive committee members, Peter Bryant, Chief Financial Officer, Paul Muller, President, Contract Mining, Ben Davis, Chief People and Sustainability Officer and President, Mining Services, Sarah Coleman, President, idoba, Raj Ratneser , Chief Legal and Risk Officer and Company Secretary, Cameron Baly , Chief Strategy Officer. And we're delighted to, and would also like to acknowledge and welcome Sy Van Dyk, who joins the group executive committee as President of the newly formed Drilling Services Division. Representatives of PricewaterhouseCoopers, the company's auditor, are also present.
Craig Heatley was lead audit partner for our FY 2023 financial report, and Helen Bathurst has taken over from Craig as lead audit partner for FY 2024. I ask that all shareholders attending the meeting in person ensure they've registered their attendance with Link Market Services at the entrance to the meeting. Shareholders and validly appointed proxies, corporate representatives, and attorneys will have received a yellow admission card. Non-voting shareholders will have received a blue admission card.
Please note that only those shareholders with a yellow or blue admission card will be allowed to ask questions or make comments on the company at the meeting. For those shareholders attending the meeting online, please follow the virtual meeting online guide via the link on your screen to register the voting card and cast your votes online and ask questions or make comments on the company.
You'll only be able to ask questions or make comments once you've registered to vote. I'd invite shareholders attending online to send through any questions as soon as possible after registration, rather than waiting until each resolution is read. The notice of meeting's been made available to all shareholders, with an updated notice of meeting released to the ASX on 14th September 2023 and made available to all shareholders.
If there's no objection, the notice of meeting will be taken as read. The procedure for today's meeting will be as follows: First, I'll give a short address. This will be followed by the Managing Director and CEO's address to shareholders. We'll then move to the formal items of business, as set out in the notice of meeting. All items of business will be voted on via a poll.
Instructions regarding the poll will be given prior to the commencement of the poll. The results of the poll will be tallied and announced via the ASX platform as soon as the results are available. After the poll's closed, shareholders will have an opportunity to ask questions about or make comments on the management of the company. Shareholders attending virtually can ask questions via the online facility, either in writing or orally through the web phone facility.
Turning now to my address. Today, I'll provide some brief opening remarks before I hand over to our Managing Director and Chief Executive Officer, Mark Norwell. He'll talk about the performance of the company over the past year and our plans for FY 2024 and beyond. At the conclusion of Mark's address, we'll move to the formal business of the meeting.
FY 2023 was a remarkably successful year for Perenti on many fronts. However, the positive achievements, which I'll come to, were overshadowed by the tragic events at Dugald River in Queensland in February, where we lost our colleagues, Dylan Langridge and Trevor Davis. This was a devastating event for everyone, most significantly for the families and friends of Dylan and Trevor, but also for their colleagues, the local community, and for the whole of our business.
There are currently several investigations underway, including by the regulator, that are focused on determining what happened at Dugald River and importantly, identifying any learnings. Irrespective of those outcomes, we remain focused on continuing to improve our safety performance. The safety risk associated with mining, and more specifically, underground mining, can't and must not be underestimated.
As one of the world's largest underground miners, it's imperative that we do all we can to make the safety of our people and the safety of the industry as good as it can possibly be, with a focus on continuous improvement and engineering controls. I can tell you, we are deeply committed to this. Following the tragedy at Dugald River, the board and Group Executive Committee took decisive action with the establishment of a Safety Transformation Task Force.
Membership includes a non-executive director, Alex Atkins, and the committee is supported by highly experienced external advisors to help us as we strive to meet our goal of no adverse life-changing events. This is in addition to several other actions previously implemented, to ensure we are continuously improving our approach in what is an inherently risky industry.
Mark will talk more about safety in his address, but on behalf of the company, I extend our deepest sympathies to the families and friends of our colleagues, Trevor and Dylan. Turning to positive achievements for the year. As I said earlier, FY 2023 was a remarkably successful year on multiple fronts. In August, our company reported record underlying EBITDA of AUD 264.1 million, having generated record underlying revenue of approximately AUD 2.9 billion. Market conditions provided our team with an opportunity, and that team, led by Mark Norwell and the Group Exec, along with the support of our 9,000 people globally, delivered excellent performance for our clients, leading to a record financial outcome. Our Contract Mining division has gone from strength to strength.
Our growth projects have successfully progressed through their ramp-up phases, while our mining projects have benefited from improved commercial conditions, recovering against significant cost escalation and the focused delivery of great operational performance by our people on the ground. The underlying performance of our mining services businesses, primarily BTP and our Supply and Logistics Direct businesses, while small in comparison, delivered improved results.
We also continued to invest in idoba's product suite, and revenue from its operating services business is trending upwards. Our operational and financial performance stems from a carefully developed and well-executed strategy. I want to especially thank Mark and the group executive for the work they've done on this over several years.
This included our refreshed strategy in June 2022, and the strategy update that was presented in June this year, which further sharpened our commercial focus and positioned sustainability as a central element of Perenti's value proposition to the industry and our investors. We're building a portfolio of strategically aligned businesses that deliver consistent quality, cash-back profits.
Our divisions, Contract Mining, Mining Services, and idoba, and as of last week, the newly formed Drilling Services division, have clear lines of internal accountability and strategic value to each other as we provide an expanded suite of mining and mining support services to our clients locally and globally. I'd like to specifically make mention of our technology division, idoba. When we first outlined our 2025 strategy in 2019, we identified a technology-driven future as a critical element of our growth.
We believe that investing in this division is fundamental to the long-term future of our business. It will ensure we remain differentiated and relevant in a rapidly and evolving, highly competitive industry, and also supports our journey to a sustainable future. Our strategy is based on a combination of optimizing our business structure, evolving our safety, performance, and business acumen, commercial and capital discipline, and a keen eye on the future as we look to enable tomorrow.
Through this focus, we're positioning Perenti to continue to deliver enduring value for our clients, employees, communities, and ultimately, our shareholders. The focus on sustainability cascades right through our business. This year, we updated our sustainability targets to include 40% female representation on the board and executive, and net zero Scope 1 and 2 greenhouse gas emissions by 2030.
We also reaffirmed our objective of no life-adverse life-changing events, along with several other important measures that you can review in our sustainability report. As part of our strategy update in June, we committed that we would allocate a percentage of free cash flow to future-focused strategic investments that support new value creation initiatives and our sustainability objectives.
We identified three key areas relating to this commitment to the future: technology and engineering solutions to more effectively mitigate and manage risks inherent in underground mining, developing new services to support decarbonization in the mining industry, and idoba product development. In June, we announced that we planned to acquire DDH1, a Tier 1 global drilling business that's highly complementary to our existing drilling capability. Last week, we completed the transaction, and again, I'd like to welcome members of the DDH1 team who are here today in person or online.
As I acknowledged earlier, they include Sy Van Dyk, the President of our newly created Drilling Services Division, and Diane Smith-Gander and Andrea Sutton, who'll join the Perenti board next week. Welcome, and we look forward to working with you as part of the Perenti team. The DDH1 acquisition aligns with our strategy and long-term vision and will help accelerate the delivery of our 2025 financial targets.
In addition, it establishes Perenti as one of the world's largest suppliers of drilling services and the largest mining services business by revenue listed on the ASX. During FY 2023, we also undertook a share buyback program to efficiently return value to shareholders, along with a successful bond buyback. And earlier this week, after the finalization of the DDH1 transaction, we announced another share buyback program, a decision that reflects our view that Perenti continues to be undervalued.
The combination of capital discipline and the successful acquisition of DDH1 will also put us in a position where we can once again consider paying dividends, something I know many shareholders are anticipating. Our performance as a business was exceptional from a financial and operational point of view. But as I said at the beginning of this address, our performance was overshadowed by the loss of two of our people at Dugald River.
I want to assure you that the board takes its responsibility around safety extremely seriously. Over the past six months, we've deliberated extensively about how we should approach remuneration of the management team in this regard. We're the custodians of a global business that has an inherently high risk exposure, that operates in 12 countries across four continents with multiple clients, and in particular, a very large number of underground mining projects.
With this context in mind, and when assessing remuneration outcomes, it's incumbent on the board in discharging our duties to act in the best interests of shareholders, to weigh up multiple factors, both within and outside the control of management. Specifically, the board has considered the following: the tragedies at Dugald River this year, following fatalities in preceding years.
Significant challenges and pressures in attracting, motivating, and retaining capable executives in an increasingly competitive labor market. Perenti's excellent performance across the full suite of financial, operational, and other business metrics. Balancing shareholder expectations across various time horizons, and the increased risk associated with underground mining, given our scale.
In weighing up these factors, the board's approach to remuneration in the context of safety performance included the following: the STIP safety gateway was applied to 20% of the scorecard with a nil outcome for all management. Two additional layers of downward discretion were also applied in relation to the STI over and above the gateway. A 5% downward discretion was applied to the business scorecard, and a further downward discretion of 10% was applied to the individual performance outcomes of the MD and CEO and President, Contract Mining.
Finally, and importantly, we performed extensive benchmarking in relation to fatalities and multiple-year fatalities on scorecard outcomes. This demonstrated to us that Perenti's 20% fatality gateway and further downward discretion exceeds that applied by peers who have a similar exposure to mining globally, particularly underground mining, and is at or near market leading.
Now, having said all that, while the resolution in relation to our remuneration report hasn't yet been put to the meeting, I can convey that the votes received so far indicate that we'll incur first strike against the report. While a clear majority of investors have voted in favor, this is nonetheless a disappointing outcome. We've engaged extensively about this with proxy advisors and investors and acknowledge the feedback from many who voted against the report, that the downward adjustments in the scorecard and through the exercise of discretion did not go far enough, given the year-on-year fatalities. As we progress into FY 2024, we'll take this feedback into consideration in conducting a review of our executive remuneration framework.
Moving on from remuneration, and very importantly, I would also like to take the opportunity to sincerely thank Mark Hine, who's retiring from the Perenti board at the conclusion of this meeting. Mark's been a non-executive director of Perenti or Ausdrill since February 2015, and his extensive mining and management experience has been invaluable to the business. I've certainly enjoyed working closely with Mark over that time. We convey to him our very best wishes for success in the next phase of his career and thank him for his fantastic contribution to our company. And as mentioned previously, we also look forward to welcoming Diane Smith-Gander and Andrea Sutton to Perenti's board next week. I'd like to thank my fellow directors for their dedication, professionalism, and absolute commitment to Perenti.
I extend those thanks to Mark Norwell and the group executive, who manage a truly global enterprise with operations across four continents, often in challenging conditions and challenging markets. On behalf of the board, I also thank our 9,000 loyal people who delivered record results in FY 2023. I welcome the 2,000 employees from DDH1, taking our combined workforce to around 11,000 in FY 2024. Our people come from incredibly diverse backgrounds and are true professionals who are great ambassadors for the company. Finally, thank you to our shareholders for your ongoing support of Perenti, and I'll now hand over to Mark before I return to conduct the business of the meeting. Thank you.
Thank you, Rob, and good morning to everyone attending our AGM in person and online. Firstly, I would like to add my welcome to our shareholders, including our new shareholders who joined the register following the recent DDH1 transaction. I hope this is the start of a long and successful relationship, and we appreciate your support of DDH1 transitioning to Perenti as we continue to focus on creating enduring value.
Before providing you with the specifics of our record financial performance in FY 2023, an update on our new drilling services division, and our progress against other key strategic initiatives, I want to first focus on safety. I'll start with the tragic events at Dugald River in February, where we lost our colleagues, Dylan Langridge and Trevor Davis. As Rob outlined, this was a devastating event, particularly for the families and friends of Dylan and Trevor.
Their loss was also felt by their colleagues, the communities of Cloncurry and Mount Isa, and across our business more broadly. Our thoughts continue to be with the family and friends of Dylan and Trevor. Given our recent tragedies and our increasing exposure to underground mining, which has a greater risk profile than surface mining, we as a company and we as an industry, absolutely must do more to keep our people safe.
We are open about this, and we have an unwavering commitment to continuously improve, which is the primary driver behind the establishment of our Safety Transformation Taskforce in April of this year. Before providing further detail on the taskforce, I want to be clear that improving our safety performance has been a priority well before the taskforce was established.
To clearly understand what actions the board and management have taken in relation to health, safety, and wellbeing, it is important to highlight some of the work that has occurred since the establishment of Perenti in 2019. Historically, our businesses were formed off the back of entrepreneurial companies that grew rapidly into large global businesses, but required significant improvement and sustained investment in relation to culture, governance, systems, and processes. This work first commenced in Barminco in early 2018, led by Paul Muller, then the newly appointed CEO of Barminco and now President of our Contract Mining division. With this work continuing across the whole organization from when Perenti was established.
Since 2019, we have invested heavily in improving our safety management system, including safety standards, processes and procedures, and engineering controls across the business. The list of what has been achieved during this period is extensive, with the key areas of focus including: a critical risk management program focused on critical controls, safety leadership and cultural engagement programs, training and development initiatives for our people, technology solutions to improve safety performance, and robust auditing and governance programs, including establishing a board sustainability committee in 2022. While we have significantly upgraded the organization in these areas, we continue to focus on improving, as continuous learning is vital to sustained positive safety performance.
Beyond these areas of focus that commenced in 2019, and after the tragic event at Dugald River and the subsequent investigation, we were determined to seek a step change in our approach with the following additional actions taken. The board expanded the remit of and renamed the Board Sustainability Committee to the Safety and Sustainability Committee and increased the frequency of meetings from two to four per year, noting that this is still a very new committee.
We established a Safety Transformation Task Force, chaired by myself, with oversight by the Board Safety and Sustainability Committee. As Rob outlined earlier, we amended our capital allocation policy to allocate a percentage of free cash flow towards future-focused strategic investments, which included a commitment to invest in technology and engineering solutions to mitigate and manage risks inherent in underground mining.
The members of the Safety Transformation Task Force include Alex Atkins, a Perenti non-executive director and mining technical and operational risk specialist, and two independent world-renowned safety experts, Professor Sidney Dekker and Peter Wilkinson, to advise the task force and board on leading practice, critical risk management, and social aspects of safety.
In support of the task force and a focus on the specifics of each division, our contract mining and mining services divisions have established safety transformation working groups, engaging two further subject matter experts, Dr. David Provan and Ms. Shannon Roberts-Gibbs. The specific reference earlier to underground mining is because through our Barminco and AUMS brands, Perenti operates 20 underground mines globally.
This exposure to underground mining is greater than most of the largest global miners, and given the increased levels of risks associated with underground mining, our exposure to these inherent risks is far greater than that of our peers and, in a majority of cases, our clients. Although many of the technical aspects of the mines in which we work are the responsibility of others, it is our people who are often at the greatest risk.
These technical aspects include the mine design and production schedule, geotechnical engineering, infrastructure design and construction, and the overall design of the safe system of work. Therefore, as a global leader in underground mining, regardless of who has technical responsibility and overall control, we have a fundamental obligation to continue to improve the health and safety performance of not only our businesses, but the broader mining industry.
Therefore, we are committed to openly share findings and learnings from the task force as we collectively work to improve the health and safety performance of Perenti, and in turn, the broader mining industry. While we have not met our objective of no adverse life-changing events, and we are devastated by the tragedies that have occurred, we are deeply committed to doing everything within our power to keep our people safe.
Over the coming years, we will continue to provide updates on our progress on improving safety across our business and share learnings applicable to the industry. Now to the business more broadly, starting with our financial results. In FY 2023, Perenti delivered record revenue and earnings for our shareholders. Our record underlying revenue of AUD 2.9 billion generated record underlying earnings of AUD 264.1 million.
This record result was at the top end of our guidance, which was upgraded on several occasions during the year. Most importantly, we recorded a significant step-up in free cash flow to almost AUD 271 million, which continues to be a focus for everyone across the organization. At the same time as delivering record financial results, we reduced our leverage to 0.9 x, bought back AUD 21.4 million of shares and AUD 24.9 million of our high-yield bonds, and we continued to deliver on our 2025 strategy and position for our 2030 strategy.
The financial performance in 2023, which underpins our ability to enable tomorrow, is a direct reflection of the resilience, capability, and commitment of our people, not just throughout 2023, but during prior years as we have navigated significant macro challenges. On behalf of the board and the group executive, thank you. Your tremendous contribution is very much appreciated.
Moving from the overarching consolidated Perenti results into the performance of our operating divisions, starting with the engine room of Perenti, our contract mining division. Once again, our people in contract mining have delivered excellent financial results. The contract mining team continue to capture value from the ramp-up of major growth projects, such as Zone Five in Botswana and Hemlo in Canada, while also improving margins across our portfolio of projects.
Their continued efforts were further enhanced by a slight easing of labor challenges, and in several locations, rise and fall mechanisms starting to recover against significant cost escalation. Within the Contract Mining division, I'd like to call out the sustained improvement of AMS. Our team has invested significant energy to improve the financial performance of AMS, and its turnaround is a testament to everyone involved.
This is a clear demonstration that when we call out challenges, we deliver on the objectives we set. Moving to our Mining Services division, which is a relatively small yet important part of Perenti's overall business. It represents a growing opportunity that has been positioned to deliver revenue and strong earnings from a modest capital base.
The underlying business improved its revenue and earnings performance this year by developing its supply chain support businesses in Africa and driving improved utilization of its BTP rental fleet in Australia. Our investment in technology products was recognized last year when Sumitomo acquired a 10% position in our technology division, idoba. This investment by Sumitomo, which I must add, was off the back of substantial due diligence around the platform and products being developed by idoba, is a strong endorsement of the value of idoba's portfolio, in which we continue to invest and develop, given its critical role in our future.
Importantly, as we head into FY 2024, idoba has started commercializing its products, generating modest revenue from product development in the form of software as a service, while continuing to work in collaboration with our Contract Mining division to test and refine our digital products. As a result of this work, the Dynamic Driver Modeling product, designed to model complex operating environments, has been deployed at one Barminco site in Australia, with two more planned this year.
DDM is a digital technology for making faster and more effective decisions using rapid scenario analysis, with the objective to deliver improved operational performance and therefore financial performance. Our second idoba product, Mine Performance Navigator, is currently being rolled out across 12 Barminco sites. MPN provides underground forecasting using AI and leverages Barminco's rich data set.
These are exciting developments that reinforce the important role idoba has in our future and the future of mining more broadly. It also demonstrates the power of Perenti, where the unique and complementary capabilities of our divisions are harnessed to ultimately unlock and maximize value for all our stakeholders.
Of course, in addition to our Contract Mining, Mining Services, and idoba divisions, we now have a dedicated Drilling Services division. This division, which includes the highly regarded and established brands, DDH1 Drilling, Ranger Drilling, Strike Drilling, and Swick Mining Services, which along with Ausdrill, is led by Sy Van Dyk. Sy is a highly regarded and experienced executive and brings significant value to Perenti, and I'm personally very pleased that Sy has joined our business from DDH, where he was the MD and CEO.
On behalf of the board, group executive, and everyone across the organization, I'd like to welcome Sy and the whole DDH1 team to Perenti. Drilling services is an attractive long-term proposition with significant growth in mining exploration and development activities needed to meet growing demand for minerals, especially those that will fuel the energy transition.
As one of the world's largest drilling services businesses, we are extremely well-positioned to deliver value for our clients and for our shareholders. In addition, we are well-placed to generate cross-selling synergies across our brands, particularly for Barminco in North America, given the presence of Swick Mining Services in this highly attractive Tier 1
region. As we welcome the DDH1 businesses to Perenti, I'm pleased to report that integration planning and now execution has progressed extremely well. Integration of the Drilling Services division is supported by detailed and, at the same time, pragmatic integration plans that are focused on the safety of our people, continuing to deliver for our clients, and realizing value-accretive synergies for our shareholders from day one.
The ease of integration of acquired businesses was a design principle of our July 2022 refreshed operating model, The Perenti Way, and this is evident in the work completed by the team to date. Importantly, the integration work is supported by the strong cultural alignment between both organizations, and with the executive leadership of Sy, we are extremely well-placed to complete a majority of the integration activities by the end of this financial year.
Beyond delivering record financial results, we are focused on and committed to embedding sustainability into everything we do. Focusing on sustainability is the right thing to do, and at the same time, there is a strategic advantage for Perenti in helping the mining industry adapt to the increasing need for sustainable mining.
To support our sustainability journey, in FY 2023, we launched our three sustainability imperatives: caring for our people and communities, valuing the environment and enabling the energy transition, and acting ethically and responsibly. In addition to our evergreen imperatives, we also announced our current five sustainability initiatives: preventing adverse life-changing events, creating safe and respectful workplaces, achieving gender balance, accelerating decarbonization, and partnering with our communities.
Each member of our group executive committee has direct responsibility to lead and embed these sustainability priorities across our business. We are supporting these priorities with group-wide initiatives, clear targets, and real investment to drive outcomes for our business. Beyond our critical focus on the safety of our people, namely preventing adverse life-changing events, which I outlined earlier, I'll provide an update on our other priorities, which are progressing well.
Our work to build safe and respectful workplaces has continued with the rollout of several elements of our It's Not Okay campaign, including leader roadmaps, group-wide awareness campaigns, and specific divisional initiatives. These are supported by targets, including achieving a gender balance with 33% female representation by 2033, and to have 40% female representation in senior leadership by 2030. The addition of Diane Smith-Gander AO and Andrea Sutton to Perenti's board, as referred to by Rob, will see Perenti achieve 50/50 gender balance on our board next week, well ahead of our 2030 target. In terms of accelerating decarbonization, we have formed a strategic collaboration with global technology company ABB. And are working with leading WA mining company IGO, in a study for the full electrification of IGO's Cosmos nickel mine.
Electrification is an area where we believe we can take a leading role, given our deep domain underground expertise through Barminco, our in-house data and digital capabilities through idoba, and our strategic partnerships with OEMs and other third-party providers. As Rob mentioned, we have also set a net zero Scope 1 and 2 greenhouse gas emission target by 2030. With the addition of DDH1, which creates the world's second-largest drilling business, along with our global expertise in contract mining, combined with our mining services business and technology business, idoba, we are well positioned for further growth. We are focused on continuing to develop our business into adjacent areas, to expand our footprint across the mining supply chain, and positioning ourselves to capture value from the drive for sustainability that will be a decisive factor in the future of our industry.
We are well advanced in delivering our 2025 strategy, which provides an excellent foundation to create enduring value and certainty as we develop our 2030 strategy, which we are set to announce by 30th of June next year. Pro forma FY 2024 guidance will be issued within the next few months, post completion of our detailed re-forecast for the year. FY 2024 has started well, and with a combination of DDH1, we are set for another record year across all financial metrics, assuming improving operating conditions continue.
We anticipate leverage will end FY 2024 better than FY 2023, the lowest in a decade, which has our balance sheet, along with our operating performance, supportive of returning value to shareholders through share buybacks and/or dividends. Underpinning every aspect of our business performance are our people, and throughout the year, we continued our focus on investing in our people.
We rolled out our flagship Leading at Perenti program to 75 of our most senior leaders, and we currently have 55 future leaders participating in our engineering graduate program. Additionally, and importantly, Perenti is one of the largest private sector employers of apprentices and trainees in Western Australia. We had over 400 participants engaged in our apprentice and trainee programs across Australia throughout FY 2023. Investment in our people will continue to be a priority for us for this year and for every year, as the strength of our business is testament to our people. It is the passion, commitment, and capability of our people that makes our business, and our people provide motivation and inspiration to me daily. Once again, on behalf of the board and group executive, thank you. I'd also like to thank our many clients.
It's our clients who give us the opportunities to demonstrate the capability of our people, the strength of our business, and ultimately, the solutions we seek to deliver to create enduring value and certainty. I'd also like to thank the Group Executive Committee and the Board for their support. It has been another year of highs and lows, but we ultimately finished the year stronger than what we started, which is what we do at Perenti. It is with this context in mind that I want to specifically call out Rob Cole, our chair, and Tim Longstaff, the chair of the Safety and Sustainability Committee, who are both up for re-election this year. Fundamentally, our business has significantly evolved over the last five years, and both Rob and Tim, as to the whole board and executive, have been instrumental in driving and supporting this journey.
From the integration of Barminco and AUMS, navigating COVID and other macro challenges, putting in place much-needed governance for a business of our scale and complexity, delivering record results, and positioning for the future. As a board and executive team, we still have further work to do. However, I am adamant when I say our business is stronger because Rob and Tim are on the board. Speaking as the MD and as a shareholder, I am personally pleased that Rob and Tim are very likely to be re-elected, and I strongly believe every shareholder should also be appreciative. In closing, I want to take a minute to thank Mark Hine and echo the sentiment, echo the comments of Rob Cole. Mark's contribution has been critical in the establishment and success of Perenti.
Through challenging periods, Mark has been resolute in supporting the business, even when faced with internal and external challenges. Mark, thank you for your support to the business for almost nine years, and to me personally, high five. You will be missed, but I wish you and Jane all the best for the future, and hopefully you can now spend some more time with your extended family. And finally, thank you to our shareholders, particularly those who have stayed with us over the last few years, and we have positioned the business to be the strong company we are today. Thank you for those attending today in person and online, and I'll now hand back to Rob.
Thanks, Mark. As mentioned, earlier, voting on all resolutions will occur by way of a poll. After each item of business has been introduced, there'll be an opportunity for shareholders to ask questions of the board in relation to that item of business before shareholders cast their vote for that resolution. Please limit your questions to the item of business being discussed. There'll be time for general questions at the conclusion of the meeting. If you're using the web phone facility, please ensure you mute the webcast meeting before using the web phone. Please note that voting prohibitions apply to Resolutions 1, 4, 5 and 6 under the Corporations Act, and voting exclusions apply to Resolutions 4, 5 and 6 under the ASX listing rules. If you're in doubt as to whether a voting exclusion or voting prohibition applies to you, please refer to the notice of meeting.
A representative of the company's share registrar, Link, will be conducting the poll as Returning Officer. As Chair of the meeting, I'll still retain the right to make all final decisions as to who may vote, the votes cast, and the declaration of the result of the poll. I'll now call on Katherine Noon from Link to advise shareholders on the procedure for conducting a poll in the meeting and via the online platform.
Today, we will be conducting a poll on Resolutions 1-6 . The persons entitled to vote on this poll are all shareholders, representatives of shareholders, and proxy holders. Only those who are entitled to vote at this meeting may cast a vote on a resolution. For those attending the meeting in person, you can cast your vote by filling out your yellow voting card. Please vote for, against, or abstain on your voting card for each of the resolutions. If you have any questions, please see a Link Market Services representative at the registration desk outside this room. For those shareholders participating in the meeting via the online platform, you can cast your vote using the electronic voting card that you received when you validated the registration.
If you have any questions about casting your vote online, please refer to the Virtual Meeting Guide online guide, or call on the number set out in the guide or on the screen in front of you. If you're in attendance today as a proxy holder and you hold open votes, these votes are yours to cast at your discretion, and you may do so by voting on each resolution accordingly. I will now hand back to the Chair.
Thank you, Kathryn. I now declare the poll open, and we'll move on to the formal business of the meeting. The first item of business is the financial reports and accounts. Under the Corporations Act, the company is obliged to lay before this meeting the last audited financial statements and reports, which were circulated and which were dated 21 August 2023. No resolution's required, but I now invite shareholders to comment or ask questions on the financial reports and accounts of the company. Questions may also be asked of the auditors in relation to the conduct of the audit, content of the audit report, accounting policies adopted by the company, and the independence of the auditor in carrying out the audit.
For those attending the meeting in person, please address all your questions to the Chair, and if you wish to speak, please speak clearly into the microphone provided so that all shareholders can hear your comment or question. When I direct, can you please state your name before speaking and hold your yellow or blue admission card, so I can see that you're a shareholder? For those who are participating via our online platform, you'll be able to submit questions by registering as a shareholder or proxy holder and selecting the Ask a Question tab or by utilizing the web phone facility. I'll consider the questions submitted online after I've taken questions from the floor and shareholders using the web phone facility.
Out of fairness to everyone, I ask that you limit your questions to one at a time and also restrict your questions and comments to the resolution being chaired. I reserve the right as chair to rule questions as not pertaining to the AGM or out of order. So are there any comments or questions from shareholders in attendance today on this item? Yes, sir.
Doug Minchin, investor. Mr. Chairman and board, I note that we didn't, or the company didn't pay dividends this last year. It did the previous year. Just wondering why? Was it because of the acquisition of DDH1 coming up, or was it because of a buyback, that was planned? And, in my view, paying a dividends is probably more beneficial to most investors than buybacks, and that would have been a preferable strategy. So I'd just like to know what your strategy was.
Okay. Thank you. Yeah, thank you for the question. First off, I acknowledge on behalf of the board, the importance of dividends, and, and repaying capital when we can to shareholders in the form of dividends, and I recognize the appetite for that. We announced some time ago now that we, in response to our own strategic thinking and, and feedback from the market, wanted to concentrate on getting our leverage, our debt level, down to an acceptable level at 1.0 x. And we committed to that. At the time, we believe it was very, very much in the best interest of all shareholders, recognizing it wouldn't necessarily be popular decision with some shareholders who'd been accustomed to receiving dividends.
And, and deciding not to pay a dividend at the end of this half, it wasn't about the DDH1 acquisition. Indeed, it was really focused on ensuring that we've got our leverage to the level we, we feel comfortable. Pleasingly, leverage has improved a lot for the company in achieving where we want it to be. With the DDH1 acquisition will go ahead, and what we've said, I think, publicly, Mark, is that in first half of this FY 2024, we'll be reviewing whether or not we can resume paying dividends. So I can't tell you now that we will or we won't, but understand the importance to shareholders. We're doing well on the, the key target that has held us back, and we'll review the position, at, at the half year. Thanks for the question. Any other questions from the floor? No? Okay.
Are there any questions from web phone participants on this item? No questions? Okay. I'll now take questions from shareholders watching online who've sent their questions online in writing.
We have received no online questions for this item.
Okay. Thank you for that. Okay, so as there are no further questions, we'll move on to the next item of business. That's the first resolution. Under the Corporations Act, listed companies are required to include, as part of their directors' report, a remuneration report, which includes specified information. The directors have prepared a remuneration report to 30 June 2023, and it's included in the annual report on Pages 72-93. The Corporations Act also requires companies to put to shareholders a resolution that the remuneration report be adopted.
I therefore move that the remuneration report of the company for the financial year ended 30 June 2023 be adopted. Under the Corporations Act, the vote is advisory only and doesn't bind the directors of the company. Voting exclusions apply to this resolution, as described in the notice of meeting. The proxy votes received in relation to this resolution are displayed on this slide. Any open and usable proxies held by me as Chair of the meeting will be voted in favor of the resolution. Based on the proxies received, I note that a number of shareholders have taken the position of voting against the remuneration report. In the light of this, in addition to the comments I made in my opening address, I just want to make the following remarks on behalf of the board.
As I said, the board has had to weigh up multiple factors when assessing remuneration outcomes in order to properly discharge our duty to act in the best interests of shareholders. And I repeat that the factors that we took into account, obviously, the tragedies at Dugald River following fatalities in preceding years. Significant challenges and pressures in attracting and retaining, motivating capable executives in an increasingly competitive labor market.
Perenti's excellent performance across the full set of, suite of financial, operational, and other business metrics. Balancing shareholder expectations across various time horizons, and the increased risk associated with underground mining, given our scale. I also reiterate that the board performed extensive benchmarking to aid us in coming to a decision on remuneration. Having said that, are there any comments or questions from the floor? Yes, sir.
Doug Minchin again, Mr. Chairman. Having run a mining services company in the past, I felt one of the worst things that could happen to a company is a fatality. And we worked underground in many mines around Australia and in open pit, and never had a fatality under my watch. I noticed there were two this year, which was tragic at Dugald River. I'm just wondering, there has been a strike by the look of those numbers, regardless of the poll in this room. And I'm wondering what will happen after that strike with that remuneration report. Does it stand? Is it modified? And with regard to short-term and long-term incentives for executives or board members, how are they affected by a fatality?
When I was running a business, if we had a fatality, we were working at many projects, Argyle, Super Pit, wherever. We, we were badly marked by a fatality or lost time injury.
Okay.
And that would affect our, you know, ability to regain work in that industry or that particular project, and it would affect the incentives and the performance incentives and remuneration potentially for those executives involved. I'm just wondering how this has affected your company.
Okay. Thanks for the question. There's actually quite a bit in that question, so if I miss one of the sub-questions, I'll come back to you just to clarify whether I've answered. Can I first reinforce that this was devastating for us? Two fatalities almost in our backyard in Queensland, in our, the core engine room of Perenti of underground mining. Utterly devastating, being felt by everyone, first and foremost by the executive, Mark, Paul, and others. So and those feelings have not subsided at all, and every single day, we're conscious of that and worry deeply about safety. So I just want to make very clear the depth of feeling within Perenti about this, and I speak on behalf of everyone in the organization. In relation... I mentioned the factors that we took into account.
I also respect that there is a view out there that we should have gone harder. Should have gone harder, should have exercised further downward discretion. There is definitely, there are strong feelings about this out there. But we weighed up multiple factors that I've talked to, as we need to responsibly, we have to weigh up multiple factors. We benchmarked what other companies in other industries are doing, what our competitors' performance is like, scorecard impacts. So we gathered a lot of information about that. And on the basis of that, we formed the view that we should apply further downward discretion. We've got various downward discretions hardwired into our scorecard, that actually, if you look at that, is industry-leading.
At the end of the day, what happened this year, though, is that we had standout financial and operational performance, incredibly strong. And so some feel that when we applied all the factors that we applied to, it didn't go far enough. As I said, I respect that view. I would add that it was a matter of judgment. There are people out there with strong feelings, but there are different views. And we have got a strike. We'll definitely need to pay attention to the feedback we've received on that by, effectively a third of our shareholders. Two-thirds of our shareholders have accepted the remuneration report and accepted that the board had to weigh up multiple factors. So it's not a straightforward issue for the board, not in our view.
Having said all that, as I said in my opening address, we'll be reviewing our remuneration framework in FY 2024 in the light of the feedback we've got and our own experience in relation to these fatalities. Does that cover the various questions you had?
Does it affect the 2023 remuneration?
No. No, we're not, we're not planning on retrospectively adjusting that, so we're talking about going forward, so.
Does it affect any long-term or short-term incentives by the fact that you've had those fatalities?
The LTIs have got different measures in them, completely separate measures. We don't have a particular any safety-related metric directly in our long-term incentives, so those will be driven by the overall performance of the company.
Well, I, I believe there should be safety, a safety KPI in any performance of any executive in the company. If, if you, if you have had a bad-
Yep
report in any particular area.
Yep.
And safety is the number one.
Yep.
It's the first thing you should be discussing in a board meeting and executive meetings.
Uh, but-
What are your-
Yep
LTIs? What are you... or worse?
Yeah. As I-
And what should there be issues in that area, and in the worst case, as we've unfortunately had, that should affect short-term and potentially long-term incentives. So maybe not so much the long term, but those incentives for that period should be severely downgraded by fatality.
So as I said, I said, we're gonna be reviewing our framework going forward. What we're not going to do is retrospectively adjust the decision we've made in relation to the FY 2023. We are gonna review it forward. Safety is absolutely critical in relation to STIs. Your question was in relation to LTIs. It's not hardwired in there, but it is definitely features in the short-term incentive scorecard, and we'll be reviewing that going forward, given the criticality of safety and our experience with these fatalities.
I think you need to look at it very closely and from the view that safety is number one and over performance. I mean, I mean, it's good for to get good performance, but if you hurt people, that's the worst thing you can do. And I think that should be taken into account, should be a key performance indicator in any bonuses given out to people involved in it.
It is in our existing scorecard. It is absolutely hardwired. It's, there's 20% automatic reduction based on a fatality. We applied two other layers of discretion, but what happened was when that was in the context of all the other things that are in our scorecard, financial and operational performance, when that was all weighed up, the performance was, sorry, the downward adjustment was relatively small.
Yeah.
We take the feedback on. We're gonna look at it, but it... Safety is absolutely critically embedded in our existing scorecards. It's, it's actually having a 20% automatic reduction in our business scorecard is pretty much industry-leading. So-
Well, I hope you get it right, because you've had a strike. You have one next year, the board's gone. I understand. So I hope you get it right for the sake of all of us in the room.
Yep. You and me, you and me both. Okay.
Mr. Chairman, I'm Bob Kelleher from the ASA Association.
Hi, Bob.
Australian Shareholders Association, representing 14 shareholders with just over 300,000 shares. Thank you for your address, and, as we've flagged, we have some concerns about your remuneration report, as well as the issue already been noted. Your remuneration consultant has resulted in you having your total shareholder return at the 75th percentile, where you get 100% of that award. We consider that a successful and growing company should do better than what everyone else does, and so you don't say you get 100% of your bonus when a quarter of your selected peers have outperformed you. So that's one problem we have.
We flagged that the return on equity target seemed to be more too easily achieved, and we've done some other calculations which show that. Or we suggested that it be reviewed, and I understand that's in train now. So, with these problems with the remuneration report and it not being suitable for a successful growing company, we'll be voting against it. Thank you.
Okay. All right. I acknowledge your comments. If I could just respond. On your point about the long-term incentive, and I think, as I understand, you're saying we are currently using 50% of, based on, median TSR and a 100% award at the 75th percentile. You're saying those percentages need to be moved higher in order for the vesting, because we're a high-performing company. So what I would say there is, we do benchmark. We're in a competitive market for people. And if there's one thing that the board could do that would not be in the best interests of our people, is set benchmarks that are tougher than the alternatives they have in the market.
We'll lose our best people because we're setting much harder and relatively, disproportionately unfair hurdles compared to competitors. So we very take the benchmarking, as do other companies, very seriously. And so I, I hear your feedback, but we believe that on the basis of good advice, that what we've put there with the 50th and the 75th percentile is appropriate, so.
Yeah. I understand that the point is that the remuneration consultant will tell you everyone else has 100% at the 75th percentile. So there's not much consideration in that. You just adopted an industry standard, and that's not appropriate for a successful growing company. Thank you.
Okay. Well, we also need to... It's a fiercely competitive labor market, and it's really important that we make sure our remuneration is comparable and competitive. In relation to ROE, those return on equity targets that you're referring to were set some time ago. At the time they were set, they were a stretch. Having said that, we've performed very strongly this year, FY 2023, and we've also completed the DDH1 acquisition, which profoundly changes the company and the financial outlook for the company. We'll be reviewing, amongst other things, the ROI, ROE measure in our LTI framework as a part of a broader review. Thanks. Are there any other questions from the floor? Okay, are there any questions from web phone participants?
Questions for this item.
No? No questions. Okay, I'll now take questions from shareholders watching online who've sent their questions online in writing.
There are no online questions.
Okay. Thanks, Anthony. Okay, thanks for the questions and the feedback. I now invite you to vote on this resolution. We'll now move on to the next item of business, re-election of directors. As stated in the notice of meeting, certain directors will retire at the AGM, and being eligible, each offer themselves for re-election as directors of the meeting. All directors' details are set out in the directors' report on Pages 68-71 of the annual report. Resolution 2, details regarding Tim Longstaff, one of the two directors up for re-election this year, are displayed on this slide. Tim's an independent non-executive director and Chair of the Safety and Sustainability Committee. He's also a member of the Audit and Risk Committee and the Nomination Committee.
Before I move that Tim be re-elected, I'd like to say a few words on behalf of the board about his performance as a director. Tim is very highly valued by the board. He brings unique skills to the board, including decades of experience as an investment banker in mergers and acquisitions and debt, debt and equity capital markets, covering mining and a wide array of other industries. He's added significant value in the governance of actual or potential acquisitions, including chairing our Ad Hoc Mergers and Acquisitions Subcommittee. In addition to his corporate and commercial acumen, he brings a wealth of experience in relation to government and broader stakeholder relations based on his experience working for the former Federal Minister for Finance and Minister for Trade, Tourism, and Investment as a senior policy advisor.
Tim is passionate about safety and sustainability, and he was instrumental in the recent formation of the dedicated Safety and Sustainability Committee of the board to increase the depth of board oversight of safety performance. In addition, he's an experienced non-executive director with roles on various other companies, including an ASX 100 company and a major federal government trading enterprise.
In short, the board considers Tim to be a high-performing director who provides critical capability to the board. The board and the company would lose significant value if Tim were not re-elected. Mark spoke about that, and I endorse Mark's comments, and we strongly and unanimously support his re-election. So I move that Tim Longstaff, who retires in accordance with Article 60 of the company's constitution, and being eligible, offers himself for re-election, be re-elected as a director of the company.
The board, other than Tim Longstaff, unanimously recommends that shareholders vote in favor of Resolution 2. The proxy votes received in relation to this resolution are displayed on this slide. Open and usable proxies held by me as chair of the meeting will be voted in favor of the resolution. Are there any comments or questions from shareholders in attendance today? Are there any questions from web phone participants?
There are no phone questions for this item.
Thank you. I'll take questions now from shareholders who've sent in any questions online.
There are no online questions.
Okay, thank you. As there are no questions, I now invite you to vote on this resolution. The next resolution proposes my re-election as a director. For the purposes of conducting this item of business, I'll pass the chair to Andrea Hall.
Thank you, Rob. Details regarding Robert Cole, the second director up for re-election this year, are shown on Slide 17. Rob is an independent non-executive director and chair of the company. He is also a member of the People and Remuneration Committee, the Audit and Risk Committee, the Nomination Committee, and until January this year, a member of the Sustainability Committee, now named the Safety and Sustainability Committee. Before I move that Rob be re-elected, I'd like to say a few words on behalf of the board on his performance as a director. I've had the pleasure of working with Rob since I joined the Perenti board in December 2019. Along with his predecessor, the late Ian Cochrane, Rob has been instrumental in building Perenti into the highly regarded and respected mining services company it is today.
Rob was appointed to the Perenti board in 2018, and then to the Chair in 2021. He has an absolute wealth of experience in energy and resources, having served in the industry for more than 35 years across senior management, executive, and board positions. Rob brings to Perenti significant legal and commercial expertise and acumen, as well as the foresight of how to run large-scale businesses across the resources and energy sectors. He is one of the most experienced non-executive directors in Western Australia, currently serving as the Chair of Iluka Resources, Chair of the privately owned Perth Airport, a member of the Curtin University Council, and previously served as Chair of Synergy. As a non-executive director, Rob oversaw the successful acquisition of Barminco, and since becoming Chair, has also overseen a second transformative transaction with the successful completion of the acquisition of DDH1 last week.
Further, he has chaired our board through the period that includes the strategy reset, the updated capital management policy, the divestment of non-core businesses, the share buyback to provide returns to shareholders throughout COVID, and more recently, our record financial performance, including record cash generation and decade-low leverage. In short, the board recognizes Rob as a highly experienced and well-regarded director and chair, who has contributed significantly to the evolution of Perenti and the development and governance of our 2025 strategy.
I'll now move that Mr. Robert Cole, who retires in accordance with Article 60 of the company's constitution, and being eligible, offers himself for re-election, be re-elected as a director of the company. The board, other than Rob Cole, unanimously recommends that shareholders vote in favor of Resolution 3. The proxy votes received in relation to this resolution are displayed on Slide 19.
Open and usable proxies held by the chair of the meeting will be voted in favor of the resolution. Are there any comments or questions from shareholders in attendance today? Yes.
Acting Chair, as you've noted, as the Australian Shareholders Association, we're very keen on board performance and board protocols and membership. As you noted, the chair is also the chair of Iluka, chair of Perth Airport, and a member of the Curtin University. Our policy is that, to avoid overloading directors, we have a policy that no director should have more than five other directors' roles, with the chair counting as two. So on our policy calculation, the chair already has five equivalent director roles. So the question is, can the chair provide advice on how his workload is affecting his performance with this company, based on his external roles?
Before I pass over to Rob to comment on that, can I just share my observations? I've never found Rob is not available, not prepared, not able to provide input into the board, given his other roles. And if anything, I think he brings additional experience to his role because of what he sees elsewhere. But I will pass over to Rob.
Thanks for the question. All I can say is, I will do what it takes. I don't believe my workload is excessive. There are two listed companies, one privately owned and one much lighter touch with Curtin University Council. I'm a very organized person. I've got a lot of experience as a chair, so I don't go in too deep nor too shallow. And I haven't found it in nine years now of working as chair on different organizations in parallel. I've never had a complaint from management, shareholders or the board around me being not seen, not making myself available, deprioritizing. So all I can do is give you an assurance that I make the time available.
I recognize the responsibility, and I would not take on the roles I've had unless I was confident that I had more than enough capacity to deliver for all companies.
Thank you for that assurance.
Thank you. Are there any questions from web phone participants on this item?
There are no phone questions for this item.
Thank you. And I will now take questions from shareholders who have sent in their questions online in writing.
There are no online questions.
Okay. As there are no further questions, I now invite you to vote on this resolution. I will now hand the chair back to Rob.
Thank you, Andrea. We'll now move on to special business. Resolution 4. Under Resolution 4, the company seeks shareholder approval for the proposed grant of performance rights under the company's incentive rights plan to the Managing Director, Mark Norwell, or his nominee for a long-term incentive for FY 2024. I now move that Resolution 4 as follows, and as set out in the notice of meeting, be passed as an ordinary resolution. That for the purposes of ASX Listing Rule 10.14 and for all other purposes, approval is given to issue 1,086,903 performance rights under the incentive rights plan to the Managing Director of the company, Mr. Mark Norwell, or his nominee, as a long-term incentive for the financial year ended 30 June 2024, as described in the explanatory memorandum.
The board, other than Mark Norwell, who abstains, unanimously recommends that shareholders vote in favor of Resolution 4. Voting exclusions apply to this resolution as described in the notice of meeting. The proxy votes received in relation to this resolution are shown on the slide. Open and usable proxies held by me as chair of the meeting will be voted in favor of the resolution. Are there any questions or comments from shareholders in attendance today?
Mr. Chairman, Doug Minchin again. As I alluded to earlier, regarding KPIs for performance, and this is another example in points four and five. I'd like to know what KPIs are used. Is it a share price? Is it a financial performance, EBIT, or is it where is safety part of that performance, which it should be? And if so, what percentage of the performance does that count? Because I think that's a critical element. As I mentioned earlier, fatality, a fatality in particular, is the worst thing I believe that can happen to a company, and it's happened a number of times. So I think that needs to be brought into the performance KPIs as well as financial performance KPIs. So I'd like to know what is the breakdown?
I mean, is it a share price key performance?
Yeah.
Is it safety? Is it...
Yeah.
What are the KPIs?
So, okay, so I'll answer that. I might ask Mark Hine to also... Well, maybe I'll get you to go on the detail, Mark, but the primary measures are total shareholder return and return on equity and a couple of strategic measures. I hasten to add that the safety component is a core component of our STI every year, every year, and the LTIs are set in a way that is conventional for listed public companies by reference primarily to total shareholder return over the longer term. I also would add that, as I said, we'll be reviewing our framework going forward in the light of the fatalities we've had. So Mark, as chair of Remco, would you like to add something?
Yeah, thanks, Rob. Yeah, it's quite detailed in the written report in terms of the LTI plan. As Rob's already alluded to, 50% is based on total shareholder return, and there's a peer group that that's in assessed against. 30% is based on the ROE, which I think has already had a couple of mentions already today. There is actually 10% to do with the safety component, which is a psychological safe environment, and that's a key issue for this industry going forward in light of, bullying and harassment and everything else that's going on. So that component's already there, and then the other percent, 10% is based on, debt leverage, and that's an important aspect in terms of questions that were asked about, well, when's the dividend going to be paid?
Well, you know, that's linked into how we actually get our debt leverage down. So it's a very detailed explanation, I know, but that's, that's the mechanics of it. Well, the share price is actually linked in with the total shareholder return. So when you're comparing peer groups, it's actually that, that's where the share price ties into that. And in fact, if I recall from the LTI component, in fact, we haven't—there's been no, that hasn't actually met the hurdles for TSR as far as the LTI is concerned.
Yeah, I mean, I'm not against incentivizing executives. I think it's a good idea and something that I believe in. But just reading through the information there, it... I said the same at another meeting, annual general meeting yesterday, where significant performance rights were being offered to the managing director. What are the KPIs? And I got a very general answer, and there were no specifics, which troubles me a bit because I'd like to see that, for instance, one being, I think the actual share price does reflect financial performance. It does reflect returns to investors and also, in a way, reflects other performances within the company in safety. Because if you might recall going back in Africa when there was an insurrection there in, I think it was Burkina Faso, and there was a major problem.
The share price crashed as a result of issues there to do with safety and deaths as a result of an insurrection. So the share price is a key performance indicator, and I think any performance rights, and as they're given freely, should reflect the share price and not just general terms of, you know, overall Perenti financial performance. What does that really mean? And I think the share price is a key indicator and should be a part of performance rights.
Can we, can I jump in there? I couldn't agree with you more. So happy to sit down and talk to you further offline. This is all spelled out in our remuneration report. TSR, which is total shareholder return, is the primary measure under the LTI, which is a combination of the share price appreciation and dividends paid to shareholders over the long term. I think it makes 70% of the LTI. It's based on... And what we do is we then benchmark our performance on that total shareholder return, of which share price appreciation is at the heart, against a selected group of peers and see whether we've outperformed that group or not. So share price, I can only assure, is absolutely at the heart of the long-term performance of the company.
We do have other strategic measures in there that Mark touched on for lower percentages around psychological safety. As I said, because of these incidents, we are taking feedback on board, and we'll be reviewing our remuneration framework more broadly.
Can you just follow up?-
Can you just... Sorry, because there are shareholders online, if you could...
I mean, it's okay to say the share price will be taken into account, but, I mean, the share price does vacillate quite a bit. At the moment, around AUD 1.03 or thereabouts. And so it depends on what you're going to set those targets at, how you're going to benchmark that. So if you said, for instance, at the end of 2024, if we hit AUD 1.20, then those performance rights are given.
Right.
That's, you know, that represents-
Okay.
50% or something, then that's fine.
Yeah.
But if we haven't actually set a target price, how do we know what the number is?
Sorry. Okay. Well, the way it works is, absolutely the conventional model for most listed companies. It works off relative total shareholder return, as in how have you performed in the market compared to your peers, as opposed to setting a specific price target a number of years ahead. And the reasoning there that the whole markets adopt, you want to assess management on their relative performance, and the whole market will move up or down, and management shouldn't be penalized. The measure should be on your relative performance, compared to your peers over time. So, it's, we don't set a specific target three years out. We do say, "You won't get your LTI unless you perform relative to your peers above a certain level." So happy to take it further. It's quite detailed, as Mark said.
It's in the remuneration report, and happy to engage with you further about that, after the meeting. Thank you. Any other questions from the floor? Any web phone questions?
There are no phone questions for this item.
Any online questions?
No online questions.
Okay. As there are no further questions, I'll now invite you to vote on this resolution. Okay, turning to Resolution 5. Under Resolution 5, the company seeks shareholder approval for the proposed grant of STI rights under the company's incentive rights plan to the Managing Director, Mark Norwell, or his nominee, as a short-term incentive for FY 2023. I now move that Resolution Five as follows, and as set out in the notice of meeting, be passed as an ordinary resolution. that for the purposes of ASX Listing Rule 10.14, and for all other purposes, approval is given to issue up to a maximum of 284,463 STI rights under the incentive rights plan to the Managing Director of the company, Mr. Mark Norwell, or his nominee, as part of Mr. Norwell's short-term incentive for the financial year ended 30 June 2023, as described in the explanatory memorandum.
The board, other than Mark Norwell, who abstains, unanimously recommends that shareholders vote in favor of Resolution 5. Voting exclusions apply to this resolution as described in the notice of meeting. The proxy votes received in relation to this resolution are displayed on Slide 24. Open and usable proxies held by me as chair of the meeting will be voted in favor of the resolution. Are there any comments or questions from shareholders in attendance today? Are there any web phone questions?
There are no phone questions for this item.
Any online questions?
No online questions.
As there aren't any questions, I now invite you to vote on this resolution. Turning to Resolution six. Under Resolution six, the company seeks shareholder approval to increase the maximum annual aggregate remuneration cap for non-executive directors by AUD 200,000. I now move that Resolution six as follows, and as set out in the notice of meeting, be passed as an ordinary resolution.
That for the purposes of ASX Listing Rule 10.17 and Article 65.1 of the Company's Constitution, and for all other purposes, the maximum annual aggregate remuneration that may be paid to the Company's non-executive directors for their ordinary services as directors is increased by AUD 200,000 from AUD 1.2 million per annum to AUD 1.4 million per annum.
Given the interest of the non-executive directors in this resolution, the Board makes no recommendation in relation to Resolution 6. Voting exclusions apply to this resolution as described in the notice of meeting. The proxy votes received in relation to this resolution are displayed on this slide. Open and usable proxies held by me as chair of the meeting will be voted in favor of the resolution. Are there any comments or questions from shareholders in attendance today? Are there any web phone questions?
There are no phone questions for this item.
Any online questions?
No online questions.
Okay. Thank you. As there aren't any questions, I now invite you to vote on this resolution. As this is the last resolution, please ensure that you complete your vote now. If attending the meeting in person, please remain seated and Link staff will collect the voting papers from you once you have completed voting. If you require more time to complete and lodge your voting paper, please raise your hand and we'll give you more time or we'll assist with any questions you may have.
For those online, you'll have five minutes after the poll has been closed to complete your votes. If you have any questions, please refer to the virtual meeting online guide or call Link on the number set out in the guide or on the screen in front of you. Have all the yellow voting papers now been collected? Thank you.
I now declare the poll closed. Online participants, you'll have a five-minute countdown appear on your screen to complete your votes. The votes will then be counted by Link, and the results of the poll will be announced to the ASX shortly. In the meantime, we'll move on to other business. As I mentioned before, my address at an AGM, shareholders are entitled to ask questions about or make comments on the management of the company. Before calling this meeting to a close, I'd like to provide shareholders with this opportunity to ask any questions that you may not have been able to ask earlier. For our online shareholders, please follow the steps in the virtual meeting online guide to ask a question or make a comment. For shareholders attending in person, as with previous ones, can you please state your name?
Please confirm that you're a shareholder or a proxyholder before speaking. Are there any questions or comments from the floor?
Chairman, well done on... I think it overall it's been a good year, apart from what we talked about earlier at Dugald River. But, it, I think the acquisition of DDH1 is a positive one. And I believe that, you know, involves a number of, services like Swick and others, but, and, and they are pretty big in North America. So could you, could you just comment a bit further on, how that will affect your company going forward, in particular with North America, and whether you're looking to take those services, say, into Africa or, or South America or elsewhere?
Yeah. No, thank you. And thanks for the feedback on the acquisition. At a board level, we think the companies fit like a glove in terms of the service offering and the geography. They really fit neatly together and really round out Perenti as a diversified, full, full-service mining services mining contractor. So we're very excited about it and delighted that it was completed last week. I might throw to Mark and possibly Tim. Tim chaired our M&A committee. Mark, do you wanna just respond first and ask Tim to elaborate?
Yeah. Thanks, Rob, and Doug, thanks for the question. Certainly, we see DDH and Perenti as an extremely positive relationship on many fronts, which we've called out in terms of the strategic rationale. Specific to your point regarding North America, we do see good cross-selling opportunities associated with Swick Mining Services already being in North America, in the US. With our Barminco business, we have two projects in Canada. Recently, we established an office in Denver, and Blair Sessions, who was running the African business for underground, has relocated to Denver to basically set up the North American business and grow that business.
I was there two weeks ago and already seeing and hearing collaboration discussions between the Swick team in Nevada with the Barminco team in Colorado. Recently, I think as of this this week, saw the Swick team picked up another new project in Nevada, and the Barminco team are looking for opportunities in Nevada as well. So, we see it as a really good positive opportunity for both businesses effectively moving forward in North America. And we have called that out as part of our strategy, even pre the DDH1 acquisition of Tier 1 opportunities in North America. As for Africa, in terms of the opportunities there for Swick Mining Services and the other businesses, we'll assess those on their merits.
We currently do diamond drilling on some projects through Barminco and AUMS in Africa, and if there is a compelling and strategic value proposition to generate returns to our shareholders, we will certainly consider those services in Africa. As for South America, that's currently not on our strategic radar. Certainly a big mining industry and certainly a large underground mining industry, particularly in Chile and Peru, and certainly increasing. We will look at that in due course, but our focus at the moment is to bed down DDH1, secure further growth in North America, and we want to be pretty measured about the timing of that. So we'll consider it, but at this stage, it's not active on the radar for us in South America.
Tim, if you pass the microphone down. Tim, anything you'd like to add from a board perspective?
Thanks, Mark. I think probably the only point to really add to the excellent answers of Mark and Rob is to emphasize that the completion of the M&A process, as Winston Churchill said, "You know, this is really the end of the beginning." And we're very conscious that the integration of DDH1 into Perenti is where a lot of the value is going to be created. And I'm pleased to say that, you know, Mark and his team have pulled together a really clear plan to do that. There's good board oversight of that plan, and that it's in implementing the business as well, that we're gonna extract the value.
Okay, thank you. Thanks for the question. Are there any other questions from the floor?
Good afternoon. Philip Gardner from Wendouree Pty Limited, shareholder. My question really is in relation to the Scope 1, Scope 2, and Scope 3 emissions. You've talked about Scope 1 and Scope 2. Scope 3 is also important because it tells you or gives an indication of whether you've got a good business model or not. And I'd just be interested in what the proportion is of Scope 3 to the total emissions you may have calculated. And just while I've just got the microphone, can I say how much I appreciate the, the, the management effort, which goes, I think, into a remarkably difficult business so successfully? Your African example, I think, is magnificent, and your growth into the rest of the world, I think, is also very good strategically. But I just wanted to make sure that the comments. There will always be things you can do better.
Okay, thank you. I really appreciate the positive feedback. In relation to Scope 1, Scope 2, Scope 3, emissions are very large relative to Scope 1 and Scope 2. So the broader problem for the industry, we aren't directly solving that. Our Scope 1 and 2, we will work with. The broader Scope 3 emissions are very large. Tim or Mark, anything you'd like to add?
Yeah. I'll, I'll lead off first then pass the mic down to Tim. Yeah, certainly, Scope 3 makes up the majority of our, our emissions, which is effectively on our, our client's sites. One of the things that we have called out in our sustainability imperatives is around broader decarbonization and energy transition. Our agreement or partnership with ABB to leverage the capability of Barminco, plus other third-party vendors, really is around looking at opportunities for driving emissions in Scope 3, which goes to our service and product offering to our customers. So it is a clear focus. I'll get Tim to sort of talk about the broader targets there, but thanks for the positive feedback too, Philip. Thanks.
Yeah. Thank you, sir. Good question. So the point I'd add here is that Perenti's been very much at the leading edge of grappling with this question of carbon. So we started measuring our Scope 1 and Scope 2 emissions, which are the ones directly in our control, way back in 2020, which was ahead of many of our peers. And back then, we had 12,002 tonnes of carbon emitted from Scope 1 and 2. I'm pleased to be able to say that this year it was down to 5,167 tonnes, which is a 57% reduction on where we were back in 2020, and it was a 23% reduction on 2022. So we're getting better on Scope 1 and 2, which are the things that we can control.
Measuring Scope 3 is very hard because we rely on third parties to get the data. We've got to get it from our customers and our suppliers. And when you think about our operations in Africa, they are not necessarily, let's just be honest, at the sharp end of measuring those things accurately. What we did do this year for the first time was measure Scope 3 category thirteen emissions, which are, in essence, the emissions that are on leased sites. And so we've started that measurement journey. We're very conscious that the International Sustainability Standards Board has just released their standard. We're gonna need to comply with that standard from 2024- 2025 financial year. But that standard has very relaxed Scope 3 aspects. It's gonna be very hard on Scopes 1 and 2.
I'm feeling very comfortable about where we're positioned on that, and we're gonna try and move at the pace of our industry and our suppliers and our customers in Scope 3. We're gonna, and I think we're not gonna be in any way falling behind, but as I said, it's access to valuable, credible data, particularly given our areas of operations, that really constrain us in that area. But we're right on to it, is the answer, sir.
Okay, thank you. Thanks for the question. Any other questions from the floor? Okay, any web, phone questions?
There are no phone questions.
Any online questions?
No online questions.
Okay. Well, thanks for those questions and comments. As mentioned earlier, the results of the poll will be available shortly and will be announced via the ASX platform. For those who have attended in person, thanks for your attendance and interest. To the shareholders and visitors participating online, we're pleased that our technology enabled your attendance today, and we also thank you for joining us remotely. We look forward to your continued support in the coming year. That ends the meeting, which I now declare closed, and for those attending in person, please join us for some light refreshments. Thank you.