Photo: Carla Gottgens/Bloomberg News
When Evolution Mining (ASX:EVN) announced this week that it had canceled hundreds of thousands of performance rights linked to its employee share plan, most investors hardly batted an eye. Such schemes go in and out of fashion, after all. But take a closer look, and the move is telling us about how serious Evolution is at aligning rewards with actual results — and how rocky the past year has been for miners.
What Actually Happened?
Simply put, Evolution granted employees’ performance rights in 2021 under its long-term incentive plan — the type of plan intended to encourage staff to achieve important production and financial milestones. There was a catch, though. Those milestones were not trivial.
Flash forward to 2025, and not all of the boxes got checked. So 428,000 performance rights were revoked — or no free shares granted, no shareholder dilution.
A Year of High Expectations, Tougher Realities
So what happened? Well, it wasn’t anything. Evolution was subjected to a combination of challenges:
Production fell short: At main sites such as Cowal and Mungari, output failed to reach the intended levels.
Costs rose: Supply chain issues and inflation eroded margins.
Gold price pressure: While gold remained relatively stable internationally, local cost bases made life more difficult.
Look at this snapshot:
| Metric | FY25 Target | FY25 Actual |
| Group gold production (oz) | 720,000 | 680,000 |
| All-in sustaining cost (A$/oz) | <1,450 | 1,525 |
Source: Company reports, FY25 update
Why It Matters
On the surface, abandoning performance rights could be boring. But in practice, it’s a strong message. Evolution’s board didn’t massage the figures or move conditions post-factum. They allowed the rights to expire — keeping with the promise that rewards are earned, not bestowed.
That matters for a number of reasons:
- – Investor confidence: Shareholders can notice the connection between compensation and performance remains firm.
- – Board discipline: Indicative of the board being serious about its function, as opposed to rubber-stamping executive rewards.
- – Market confidence: In an environment where corporate governance is in the spotlight, actions like this make headlines.
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How Big Was the Impact?
The cancelled rights account for approximately 14% of what was issued in that LTI cycle. As perspective, here’s what the last couple of years look like:
| Year | Rights Cancelled | % of Issued That Year |
| 2023 | 312,000 | 11% |
| 2024 | 270,500 | 9% |
| 2025 | 428,000 | 14% |
It’s a jump — but not unexpected given the tougher conditions.
A View From the Market
Analysts have generally welcomed the decision. Mark Keating, a mining governance consultant, put it like this:
“It’s not about punishing people. It’s about preserving credibility. Evolution had targets. They weren’t met. The board acted. That’s what good governance looks like.”
Meanwhile, some shareholders say they hope the company will revisit how future targets are set, especially in a volatile gold market.
Evolution’s Next Steps
Evolution mining isn’t ripping up its incentive playbook. The company confirmed its next round of long-term incentives will keep performance at the heart of rewards.
In its most recent communication, Evolution mining emphasised that:
- It will review targets annually to ensure they’re challenging but realistic.
- There are no plans to backfill cancelled rights or offer replacement securities.
- It remains committed to linking pay with shareholder value creation.
The Bigger Picture
This isn’t just an Evolution story. Across the ASX, more boards are facing pressure to prove their incentive schemes drive the right behaviours.
A quick comparison of gold sector performance rights trends:
| Company | FY25 Rights Lapsed (%) |
| Evolution Mining | 14 |
| Northern Star | 10 |
| Regis Resources | 12 |
In an environment where costs are up and margins are tight, expect to see more of this kind of news.
