CSL Ltd Annual Report 2020

3.2.6 Leading and Managing Modifier 5 The 2016 Annual Return on Invested Capital figure includes the gain on acquisition of Novartis’ global influenza vaccine business of US$176.1m. The opening share price on 1 July 2015 was A$86.21. The Total Dividends per Share is the actual total dividends paid within the financial year. The Board, based on recommendations from the CEO for Executive KMP, and the Human Resources and Remuneration Committee (HRRC) for the CEO, has the discretion to apply a ‘Leading and Managing’ modifier to both the STI and LTI opportunity – allowing for recognition of extraordinary contribution in exceptional circumstances or significant leadership failure across culture and diversity. Applied to the overall STI outcome or LTI target opportunity, there can be an increase of up to 20% or a decrease of up to 50% applied. In 2020, the Leading and Managing modifier was not used as the CEO and the Board determined that all Executive KMP had met expectations in the leadership of their respective business units and outcomes delivered, and consistently modelled the CSL Values. Below sets out an illustrative example of how the Modifier is used on STI outcomes. KPI outcomes assessed by the Board Proposed STI outcome determined Modifier applied in exceptional circumstances Final STI outcome determined In addition to consideration during the determination of KPI outcomes, the modifier is also utilised for the assessment of the management of risk – both financial and non-financial. In consultation with the Audit and Risk Management Committee, the HRRC use a principles approach to ensure alignment between remuneration outcomes and performance. This enables Management to bring awareness to behaviours that encourage unacceptable levels of risk and discourage those behaviours, promotes behaviours that encourage acceptable levels of risk and enables the Board to recognise and appropriately address both acceptable and unacceptable behaviours. In the event of a significant risk management failure, the Board has the discretion to adjust further than the 50% downwards outcome, including to zero. 4. CSL Performance and Shareholder Returns 4.1 Financial Performance from 2014 to 2020 The following graphs 5 summarise key financial performance over the past seven financial years. We have disclosed over a seven year period to align with our ROIC LTI performance measurement period. Net Profit After Tax (millions) – USD Earnings Per Share (cents) – USD Cash Inflow From Operating Activities (millions USD) Annual Return on Invested Capital Closing Share Price (dollars) – AUD Total Shareholder Return (12month %) – AUD Total Dividends Per Share (cents USD) 0 500 1,000 1,500 2,000 2,500 2020 2019 2018 2017 2016 2015 2014 0% 5% 10% 15% 20% 25% 30% 35% 2020 2019 2018 2017 2016 2015 2014 Net Profit After Tax/ Earnings Per Share (USD) Closing Share Price (at 30 June AUD)/ Total Shareholder Return 0 500 1,000 1,500 2,000 2,500 2020 2019 2018 2017 2016 2015 2014 0 100 200 300 400 500 0 80 160 240 320 400 2020 2019 2018 2017 2016 2015 2014 0% 10% 20% 30% 40% 50% 0 50 100 150 200 2020 2019 2018 2017 2016 2015 2014 CSL Limited Annual Report 2020 76 Directors’ Report