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Below is a summary of the executive remuneration framework of Woolworth Group in the financial year of 2019. Remuneration framework Our Remuneration Framework Supports the

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Below is a summary of the executive remuneration framework of Woolworth Group in the financial year of 2019. Remuneration framework Our Remuneration Framework Supports the Strategy Total Fixed Remuneration (TFR) TFR Consists of Base Salary, Superannuation and Car Allowance TFR is set in relation to the external market and takes into account: size and complexity of the role individual responsibilities experience and skills Target TFR positioning is median of our Comparator Group, which includes the ASX25 plus additional reference as required to major national and international retailers. Short Term Incentive (STI) 50% of the STI is delivered in cash and the remaining 50% is deferred in share rights for two years STI Balanced Scorecard, with 60% Weighted on Financial objectives 40% on Non-financial objectives: Sales (20%) EBIT (20%) . Working Capital (20%) Customer Satisfaction (20%) Safety (20%) Individual performance includes assessment against business and Ways-of-Working goals. Long Term Incentives (LTI) Performance rights vesting after three years LTI supports alignment to long-term overall company performance and is consistent with strategic business drivers and long-term shareholder return. Consists of three equally weighted measures: . Relative TSR Sales Per Square Metre Return on Funds Employed (ROFE) NOTE: TSR = Total shareholder return. EBIT = earnings before income and tax Required Using agency theory, discuss the compensation structure used by Woolworths. Please also address why managers are rewarded in a way that is tied to the profits of the firm and what are the possible outcomes

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