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? ROIC – 20% weighting

(CONTINUED)

Calculation of invested capital and average invested capital at the end of the reporting period ($,000)

FY21

FY22

FY23

Equity attributable to Shareholders of AUB Group as at 30 June External interest-bearing Loans and Borrowings (excluding lease liabilities) Less cash and cash equivalents (excluding cash held in trust)

478,754

854,494

1,279,853

212,283

47,802

584,230

(76,588)

(259,329)

(260,352)

Invested Capital

614,449 595,561

642,967 1,603,731

Average Invested Capital

628,708

1,123,349

3 year average ROIC

11.8%

11.7%

12.6%

Why were these performance conditions chosen?

The Board is confident that it has the right arrangements in place to drive performance and retention in line with shareholders’ interests. EPS – Is a relevant indicator of increases in shareholder value; and – Is a target that provides a suitable line of sight to encourage executive performance. Relative TSR – Ensures alignment between comparative shareholder return and reward for the executive; – Provides a relative test that reflects AUB Group’s performance against the market and an objective test reflective of management’s performance in growing earnings per share; and – Is widely understood and accepted by key stakeholders. ROIC – Ensures alignment between an increase in underlying profit and appropriate returns on new acquisitions; – Indicates the company’s ability to generate a return on all its capital; – Outcomes can be measured against peers to determine relative performance; and – Performance can be measured against acquisition strategy and compared against actual outcomes. EPS and ROIC results are calculated by AUB Group and an external remuneration advisor tests the TSR results as soon as practicable after the end of the relevant three year performance period. The calculations are considered by the Board to determine vesting outcomes. The vesting conditions are therefore tested at the end of the performance period and the Board determines the relevant number (if any) of PSRs that will vest and convert into shares. Calculation of the vesting conditions and achievement against the vesting conditions is determined by the Board in its absolute discretion, having regard to any matters that it considers relevant (including any adjustments for unusual or non-recurring items that the Board considers appropriate). Any PSRs that do not vest following testing at the completion of the performance period, lapse.

Who assesses performance and when?

AUB GROUP ANNUAL REPORT 2023

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