AUB Group Limited Annual Report 2023

DIRECTORS’ REPORT YEAR ENDED 30 JUNE 2023

SECTION 2 HOW VARIABLE REMUNERATION IS STRUCTURED (CONTINUED)

FY23 LONG TERM INCENTIVE – HOW DOES IT WORK? Description

Under the FY23 LTI Plan, annual grants of PSRs are made to eligible participants to align remuneration outcomes with the creation of sustainable shareholder value over the long term. Group Executives are eligible to participate, as these employees on an individual basis have the

ability to impact AUB Group’s longer term financial performance. Non-Executive Directors are not eligible to participate in the LTI Plan.

LTI opportunity

The number of PSRs granted to a Group Executive is calculated by dividing the dollar value of the Group Executive’s LTI Opportunity by the VWAP over the 60 trading days prior to the start of the relevant performance period. In determining the ‘LTI Opportunity’, the Board will take into account the nature of the position, the context of the current market, the function and purpose of the long-term component and other relevant information. PSRs will only vest to the extent that the vesting conditions and ongoing employment conditions (set out below later in this table) are satisfied over the relevant three year performance period. PSRs are tested against three vesting conditions over a three year performance period: – 40% of PSRs are tested against an EPS hurdle; – 40% of PSRs are tested against a Relative TSR hurdle; and – 20% of PSRs are tested against a Return on Invested Capital (ROIC) hurdle. Vesting outcomes for FY20 and FY19 LTI PSRs exercised during FY23 are detailed in Note 21 of the Financial Report. The EPS vesting condition is measured by comparing the Compound Annual Growth Rate (CAGR) of the Underlying EPS from the financial year immediately preceding the start of the performance period to the Underlying EPS for the final year of the performance period. CAGR is therefore measured using the most recent financial year-end prior to the grant as the base year and the final financial year in the three-year performance period as the end year. The percentage of EPS PSRs granted in FY23 that may vest is determined based on the following vesting schedule (see hurdles and outcomes of FY21 grants in section 3 of this report):

Vesting conditions

EPS – 40% weighting

Base and required EPS Outcomes for FY23 Grant (cents per share – cps)

PSRs subject to EPS vesting condition that vests (%)

CAGR of Underlying EPS

Base for EPS growth

30 June 2022 Underlying EPS

96.70 cps Base

Less than 7%

0%

Less than 118.46 cps in FY25 At 118.46 cps in FY25 Between 118.46 cps and 135.85 cps in FY25 135.85 cps in FY25 or greater

7%

50%

Greater than 7% to less than 12%

Straight line vesting between 50% and 100%

12% or more

100%

AUB GROUP ANNUAL REPORT 2023

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