Directors’ Report 17. Remuneration Report Dear Fellow Shareholder, On behalf of the Board of Directors, I am pleased to present CSL’s Remuneration Report (Report) for the financial year ended 30 June 2022 (2022). This Report contains detailed information regarding CSL’s Key Management Personnel (KMP) for 2022. CSL plays a critical role in the global community – providing life-saving therapies to people with serious disease, and vaccines that protect public health. The Board is proud of the entire CSL team for delivering on this during 2022. Delivering on our Promise in 2022 Under the leadership of our Chief Executive Officer and Managing Director (CEO), Mr Paul Perreault, CSL has again shown resilience in its 2022 results. Remaining focused on our promise to patients and public health means we have delivered: • Net Profit after Tax (NPAT) of US$2,254.7m, in line with expectations; • An increase in Revenue of 2% to US$10,561.9m; • Cashflow fromOperations (CFO) of US$2,628.7m; • An annual Return on Invested Capital (ROIC) of 18.1%; • Earnings per Share (EPS) of US$4.81; • Significant growth in Research and Development (R&D) investment and R&D pipeline progression; • 27 new plasma centres opened, taking the global total to 330; and • Completion of the acquisition of Vifor Pharma AG (Vifor) on 9 August 2022. 2022 Key Management Personnel Changes Ms Alison Watkins AM and Professor Duncan Maskell joined the Board as Non-Executive Directors (NED) in August 2021. In October 2021, Professor Andrew Cuthbertson AO retired from his role as Executive Director and Senior Advisor to the CEO. We are pleased to retain Professor Cuthbertson’s extensive experience in medicine, science, research and development and he was re-elected by shareholders as a non-independent NED. 2022 CEO Remuneration Outcomes In 2022, Mr Perreault received an increase in Fixed Reward of 3%, taking this to US$1,803,530 effective 1 September 2021. Mr Perreault’s short term incentive (STI) target was held at 120% of Fixed Reward and his long term incentive (LTI) target remained at 400% of Fixed Reward. Mr Perreault will receive a STI payment of US$3,029,931 for performance in 2022. The outcome is 140% of Mr Perreault’s target reflecting below target performance on NPAT, a strong above target CFO outcome and an individual performance outcome that was above target. Mr Perreault also led the team in the successful US$11.7b acquisition of Vifor throughout 2022 which was completed shortly following the end of the financial year, adding a growth pillar to CSL. Details of these outcomes can be found in section 6 of the Report. In 2022, LTI awards granted to Mr Perreault over the period October 2017 to September 2020 had partial vesting and he received shares worth US$7,775,435 (based on the face value of the award at the date of vesting). Further detail can be found in sections 6.4 and 8.2. The 2022 ‘realised’ remuneration for Mr Perreault was US$12,710,883 and was a 72% decrease from 2021 (full detail is provided in section 8.2, Table 13). This lower outcome was driven by the end of legacy LTI Option and Performance Right awards (granted at fair value) that had previously vested through until 2021, and saw significant growth in value over the period from grant to vesting. 2022 CEO Realised Remuneration 0% 20% 40% 60% 80% 100% ● Total Fixed Reward Received ● Total STI Received ● LTI Received – Performance Share Units (2018) ● LTI Received – Performance Share Units (2019) ● LTI Received – Performance Share Units (2020) ● LTI Received – Performance Share Units (2021) Board Discretion Applied to Remuneration The Board reviewed the quality of earnings, impact of COVID-19 and risk management outcomes across the year. As the Vifor acquisition was not contemplated at the time of setting the targets at the start of the financial year, the Board used its discretion to remove the Vifor acquisition costs and benefits (including favourable hedging activities) for the calculation of STI outcomes. Further detail is provided in section 6.1. The Leading and Managing Modifier was not applied in 2022. Remuneration Framework Changes Introduced in 2022 As communicated last year, following a review of the remuneration framework aimed at ensuring a fit for purpose design, alignment to our Total Reward Principles and responding to feedback from our investors, in 2022 the following changes were introduced: • Maximum STI – Increase of the maximum STI payout from 150% to 200% of STI target opportunity – driving our pay for performance philosophy, incentivising for outperformance and aligning to our global pharmaceutical/ biotechnology peers; • LTI Performance Measures – Introduction of a second LTI measure of EPS growth – aligned to shareholder experience. This second measure ensures focus on long term sustainable earnings growth and is aligned to market practice and investor expectations; and CSL Limited Annual Report 2021/22 70
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