Suncorp has renewed the contract of its chief executive John Mulcahy, whose new 12-month rolling contract is worth $2 million.
Suncorp chairman John Story said Mulcahy's original five-year contract was due to expire in January 2008, though a new agreement was struck which will be based on a 12-month rolling contract.
Story said the new contract reflects the increased complexity of Mulcahy's role following Suncorp's merger with Promina.
The new contract will increase Mulcahy's fixed remuneration by $200,000 per annum to $2 million, including compulsory superannuation contributions.
Under the terms of the new agreement, Mulcahy is entitled to receive up to 150 per cent of his fixed remuneration (previously 100 per cent) as an annual short term incentive payment for the 2008 and 2009 financial years, which covers the period of the Promina integration, provided certain performance targets set by the board are achieved.
The board may approve a short-term incentive payment above 150 per cent in the event of overperformance.
In accordance with the long-term incentive arrangements in place for other Suncorp senior executives, Mulcahy has received offers of performance shares during each year of his term in office, commencing in 2003.
All offers have been made in accordance with the terms of the Suncorp executive performance share plan (EPSP) and are therefore subject to the terms of the EPSP including total shareholder return (TSR) based performance hurdles as detailed in Suncorp's 2006 remuneration report.
Mulcahy's new contract is effective immediately.
