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Directors’ Report continued

Coca-Cola Amatil Limited

For the financial year ended 31 December 2007

Remuneration report

This remuneration report outlines the Director and executive remuneration
arrangements of the Company and the Group in accordance with the
requirements of the Corporations Act 2001 and its Regulations. It also
provides the remuneration disclosures required by paragraphs Aus 25.4 to
Aus 25.7.2 of AASB 124 Related Party Disclosures, which have been
transferred to the remuneration report in accordance with Corporations
Amendment Regulations 2006 (No. 4). For the purposes of this report, key
management personnel of the Group are defined as those persons having
authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, including any
Director (whether executive or otherwise) of the Company, and includes the
five executives in the Company and the Group receiving the highest
remuneration. The information contained in this report has been audited.

For the purposes of this report, the term executive encompasses the senior
executives, general managers and secretaries of the Company and
the Group.

Compensation Committee

a)
Function

The Compensation Committee (the Committee) is a Committee of the Board
of Directors. Its functions are to review –

•
issues relating to the remuneration of CCA’s Group Managing Director,
senior executives and Non-Executive Directors;
•
senior executives succession planning; and
•
general matters of remuneration and succession planning.
b) Membership

The Committee will comprise four Non-Executive Directors. The CCA Board
appoints the Chairman of the Committee.

c) Meetings

The Committee will meet at a minimum of three times per year. The normal
meeting schedule will be four meetings per year, being in February, June,
August and December. The Committee can also meet on such other
occasions as deemed necessary by the Chairman. A quorum for meetings
will be two members. CCA’s Group Managing Director, Human Resources
Director and Remuneration Manager will be in attendance for the
meetings. The Chairman of the Committee will report the findings and
recommendations of the Committee to the Board at its next meeting.

d) Responsibilities

Remuneration

On an annual basis, the Committee will –

•
obtain data from external remuneration sources to ensure the
Company's remuneration practices are in line with market conditions;

•
review the Group Managing Director’s remuneration package, incentive
payments and termination arrangements and where appropriate make
recommendations to the Board;
•
review and approve all material remuneration components of senior
executive remuneration packages and incentive payments (at CCA job
grade C and above);
•
review country retirement plans;
•
review and approve senior executive variable incentive plan rules and
participation for the forthcoming year (both annual cash plans and the
Long Term Incentive Share Plan); and
•
review and where appropriate make recommendations to the Board for
changes to Non-Executive Director remuneration.
The Committee also reviews any appointments, terminations and changes
to remuneration during the year for those senior executives reporting
directly to the Group Managing Director.

Succession planning

On at least an annual basis, the Committee will review the succession
plans for the Group Managing Director and senior executives.

e) Authority

With respect to remuneration –

•
for senior executives, the Committee has the authority to approve
remuneration, policies and procedures. Matters of significant
importance will be referred to the Board; and
•
recommendations on the Group Managing Director and Non-Executive
Director remuneration will be referred to the Board.
With respect to succession planning –

•
for senior executives, the Committee has the authority to approve.
Matters of significant importance will be referred to the Board; and
•
recommendations on the Group Managing Director succession planning
will be referred to the Board.
Remuneration Policy

The Committee is responsible for reviewing the nature and amount of the
Group Managing Director’s and senior executives’ remuneration. In
determining the composition and amount of the Group Managing Director’s
and senior executives’ remuneration, the Committee applies the Company’s
Remuneration Policy in which the main principles and practices are as
follows –

•
remuneration will be competitively set to attract, motivate and retain
top calibre executives;
•
remuneration will incorporate, to a significant degree, variable pay for
performance elements, both short term and long term, which will –
–
link executive reward with the strategic goals and performance
of the Group;
–
align the interests of executives with those of shareholders;
–
reward the Group Managing Director and senior executives for
Group, business unit (where applicable) and individual
performance against appropriate benchmarks and targets; and
–
ensure total remuneration is competitive by market standards;
•
remuneration will be reviewed annually by the Committee through a
process that considers Group, business unit and individual performance.
The Committee will also consider pertinent advice from external
consultants on current international and local market practices and will
take account of market comparisons for similar roles together with the
level of responsibilities of the individual;
•
remuneration systems will complement and reinforce the Company’s
Code of Conduct and succession planning; and
•
remuneration and terms and conditions of employment will be specified
in an individual letter of employment and signed by the Company and
the executive. The relationship of remuneration, potential annual
incentive and long term incentive payments is established for each level
of executive management by the Committee. For executives, the
potential incentive payments as a proportion of total potential
remuneration increase with seniority and responsibility in the
organisation.
Remuneration structure

The Company’s remuneration structure provides the flexibility to design
individual remuneration packages for the Group Managing Director and
executives based on their importance to the success of the business and
their potential to impact business performance.