CSL Ltd Annual Report 2021

8. 2021 and 2022 Executive Key Management Personnel Remuneration 27 At the date of grant, the Options were out of the money as the exercise price was higher than the CSL closing share price on the date of grant. 8.1 CEO Target Remuneration The Board determines any increases to reward for the CEO based on his performance and relative to external benchmarks. When comparing Mr Perreault’s total reward to the reward of CEOs across the pharmaceutical/biotechnology peer group, Mr Perreault lags the median – specifically on the LTI component. 8.1.1 2021 CEO Target Remuneration As has been the case for the prior five years, there was no increase to fixed reward, remaining at US$1,751,000. Mr Perreault’s STI percentage remained set at 120% of his Fixed Reward for target performance and his maximum payout opportunity capped at 180% for outstanding performance. There was no increase applied to his LTI target, remaining at 400% of fixed reward (also maximum opportunity). 8.1.2 2022 CEO Target Remuneration In 2022, the Board has determined that Mr Perreault will receive a 3% increase to Fixed Reward. There will be no change to Mr Perreault’s STI percentage, again remaining at 120% of his Fixed Reward for target performance. As noted in section 4 with the changes being introduced to the remuneration framework in 2022, Mr Perreault’s maximum STI payout opportunity will be increased to 240% for outstanding performance (i.e. target of 120%multiplied by 200%maximum outcome). There was no increase applied to his LTI target, remaining at 400% of fixed reward (also maximum opportunity). Mr Perreault’s target reward for 2022 is displayed below, along with the 2022 comparison to CEOs in our pharmaceutical/biotechnology peer group. 2022 CEO Target Remuneration and Peer Group Comparison – USD 2022 Total Target Direct Compensation 2022 LTI Target 2022 STI Target 2022 Fixed Reward 15% 16% 100% US$1,430,785/US$1,516,136 15,809,051 11,181,886 12,360,000 7,214,120 1,961,053 2,164,236 1,541,486 1,803,530 ● Peer Group CEO - median ● P Perreault 8.2 2021 Executive KMP Realised Remuneration 8.2.1 2021 CEO Realised Remuneration Below we have disclosed the CEO ‘realised’ remuneration. This is a voluntary disclosure which the Board believes is simple and affords a transparent view of what the CEO’s actual take-home pay was in 2021. These outcomes are aligned with the CEO’s and CSL’s performance during 2021, as well as being aligned to CSL’s longer term performance. This information has not been prepared in accordance with the Australian accounting standards. See section 7.1 Table 10 for the Statutory Remuneration disclosure that has been prepared in accordance with the Australian accounting standards. 2021 CEO Realised Remuneration – USD 0% 20% 30% 50% 70% 90% 10% 40% 60% 80% 100% ● 2021 Total Fixed Reward ● Total STI Received ● Total LTI Received 1,866,383 1,807,032 41,686,616 Mr Perreault’s total ‘realised’ remuneration for 2021 was US$45,360,031 and this is a 61% increase from the prior year. Consistent with prior years, this increase was driven by the vesting of LTI awards made under our legacy plans – the 2017 Option and Performance Right awards (granted 1 October 2016 with further details in section 6.4). The value shown is based on the value of LTI at the vesting date and is converted to USD at the average exchange rate for the 2021 financial year of 1.34557. The actual value to Mr Perreault is based on the share price at the date of exercise and any exchange rate at that time. This is the final award vesting under our legacy plan. As you will have experienced as shareholders, there has been a significant increase in the CSL share price over this period (Options had an exercise price of A$107.25 (set at grant 27 ) and the share price at vesting was A$300.00) leading to increased reward outcomes for the CEO. The graph following, depicts the increase in value of each of the vested awards over the period of grant to vest using the face value of the vested award at each point in time (CSL closing share price). For Options, the value shown is the difference between the exercise price and the closing price on date of vest. CEO – 2021 Vested LTI Award Growth Performance Share Units Performance Share Units Performance Share Units Performance Rights Options 15% 16% 100% US$1,982,890/US$2,318,846 US$1,476,129/US$1,829,202 US$1,209,211/US$2,542,629 US$4,043,046/US$11,572,911 US$-/US$23,423,028 ● Face Value at Grant (USD) ● Face Value at Vest (USD) Oct 2016 Oct 2016 Oct 2017 Oct 2018 Sep 2019 Our executive remuneration framework is designed to align employee and shareholder interests. As noted above the increase in the CSL share price over the past five years has been significant. The following graph shows CSL’s Total Shareholder Return (TSR) performance compared to our global pharmaceutical/biotechnology peer group over the past five years. CSL Limited Annual Report 2020/21 95