SERVICE STREAM LIMITED — Remuneration Information 2019

Jun 23, 2019

24 June 2019

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ASX & MEDIA RELEASE

Changes to Managing Director remuneration

This announcement sets out changes that have been made to the remuneration arrangements of the Managing Director of Service Stream Limited (ASX:SSM), Mr. Leigh Mackender, commencing 1 July 2019.

Remuneration Review

The changes to Mr. Mackender’s remuneration arrangements coincide with cessation of Service Stream’s Executive Share-based Incentive Plan (ESBIP).

The ESBIP was a share-based incentive plan that was established by the Board in 2014 to operate for a five-year period from FY15 to FY19 and offered to the Managing Director and to a small number of other key executives of the time.

Participation in the ESBIP was conditional on each invited Executive agreeing to forego participation in the Short-term Incentive Plan (STIP) and the Long-term Incentive Plan (LTIP) applicable to that five-year period.

In light of the pending cessation of the ESBIP and in-line with Service Stream’s policy to periodically review its remuneration framework, the Service Stream Board of Directors recently engaged external remuneration consultants to conduct a broad review of the Company’s executive remuneration arrangements.

The Board has accepted that review’s recommendation that the remuneration of the Managing Director and key Executives revert to a combination of fixed salary, short-term cash-based incentive plan (STIP) and long-term sharebased incentive plan (LTIP) with effect from 1 July 2019.

The review also included recommendations on the design and operation of the STIP and LTIP, and a comparison against programs operated by peer companies within the services sector.

It is expected that the overall cost to the Group of the new remuneration arrangements will be less than continuation of existing arrangements.

Revised Remuneration arrangements of the Managing Director

With effect from 1 July 2019, Mr. Mackender’s remuneration will consist of:

• Total Fixed Remuneration:

  • $900,000 (inclusive of superannuation)

• Short-Term Cash-Based Incentive:

  • 50% of Total Fixed Remuneration,

  • $450,000 target (with maximum opportunity capped at 100% of target)

• Long-Term Share-Based Incentive:

  • 75% of Total Fixed Remuneration,

  • $675,000 target (with maximum opportunity capped at 100% of target)

Under the revised arrangements, 56% of Mr. Mackender’s annual remuneration will be ‘at risk’, with up to 33% awarded in Service Stream equity, subject to meeting relevant performance hurdles.

SERVICE STREAM LIMITED ABN 46 072 369 870

HEAD OFFICE Level 4, 357 Collins Street, Melbourne Vic 3000 | Mailing Address: PO Box 14570 Melbourne VIC 8001 T +61 3 9677 8888 | F +61 3 9677 8877 | E info@servicestream.com.au | www.servicestream.com.au

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The key terms of Mr. Mackender’s revised remuneration for FY20, and a comparison to that of FY19, are set out in the table in the attachment to this announcement.

Shareholder approval for the award of performance rights arising from Mr. Mackender’s participation in LTIP will be sought at the Company’s 2019 Annual General Meeting, with all relevant details of the LTIP provided in the Notice of Meeting.

For further details contact:

Service Stream Limited

Brett Gallagher, Chairman Tel: +61 3 9677 8888

Service Stream Limited

Bob Grant, Chief Financial Officer Tel: +61 3 9937 6350

About Service Stream Limited:

Service Stream is a public company listed on the Australian Securities Exchange (Code: SSM). The Service Stream Group is a provider of essential network services to the telecommunications and utility sectors. Service Stream operates across all states and territories, has a workforce in excess of 2,200 employees and access to a pool of over 3,000 specialist contractors. For more information please visit www.servicestream.com.au

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Attachment

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----- Start of picture text ----- Revised Previousremuneration arrangement remuneration arrangementFixed remuneration$900,000 $550,000(inclusive of superannuation)$450,000 (maximum at 100% of target)Short-term cash-based incentive 22% of remuneration package N/APlan: STIP$675,000 (maximum at 100% of target)Long-term share-based incentive 33% of remuneration package N/APlan: LTIP1,000,000 performance rightsShort-term share-based incentive N/APlan: ESBIP$675,000 to be converted to a fixednumber of performance rights based on theLTI Allocation MethodologyVWAP of the Company's share price at offerdate.Performance rights will vest subject to thesatisfaction of Earnings per Share (EPS) andLTI Performance Conditions relative Total Shareholder Return (rTSR)targets set by the Board for the 3-yearperiod.EPS 80%Weighting of LTI Vesting CriteriarTSR 20%----- End of picture text -----

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