• LTI Vesting Period – Removal of vesting of awards at years one, two and four to a single point, three year vest. Responding to investor feedback, this also aligns with the approach taken by our global pharmaceutical/ biotechnology peers. During 2022, the Human Resources and Remuneration Committee (HRRC) reviewed the Malus and Clawback Policy to ensure appropriate provisions were included and the policy was in line with market practice. Changes were made to further strengthen and articulate the circumstances for which an adjustment may be made. Remuneration in 2023 As discussed in prior year Reports and across investor meetings, the Board continues to review and adjust the reward of Executive KMP to drive reward positioning towards themedian of our global pharmaceutical/biotechnology peer group. For 2023, the Board has determined that Mr Perreault will receive a 3.5% increase to Fixed Reward, no change in STI target and an increase in his LTI target to 450%, from 400% of Fixed Reward. This change to LTI target is a step towards bringing our CEO’s Total Target Reward to the median of our global pharmaceutical/biotechnology peer group, positioning him at 81% of the median (or 50th percentile) in 2023. For our remaining Executive KMP, in 2023 an increase to Fixed Reward of 3.7% and 3.5% will be applied to Ms Joy Linton, our Chief Financial Officer and Dr Paul McKenzie, our Chief Operating Officer, respectively. There will be alignment of the STI targets across the Executive team and Ms Linton’s STI target will increase to 100% of Fixed Reward. As we continue to drive towards median Total Target Reward among our global pharmaceutical/biotechnology peers, both Ms Linton and Dr McKenzie will have an increase to LTI targets. Ms Linton’s target will increase to 225% of Fixed Reward and Dr McKenzie to 425% of Fixed Reward. Following benchmarking against ASX12 and ASX25 NED remuneration, there will be an increase in fees of 3% for all Board and Committee roles, effective 1 July 2022. The increase enables CSL to offer a competitive fee to attract and retain experienced directors. Embedding Environment, Social and Governance in our Remuneration in Framework Effective 1 July 2022, we will introduce a global sustainability measure into our STI plan. In 2023 the measure will include milestones that: • Establish a robust program governance process; • Undertake global initiatives that reduce CO2 emissions; • Incorporate sustainable design in our new facilities: and • Engage with our supply partners to achieve a low emission supply chain. The measure, with a 5% weighting, will be in addition to measures already included in the individual key performance indicators for Executive KMP and Executives. In addition to the financial measures of NPAT and CFO, this will ensure collective focus and accountability on our long term sustainability and global footprint. The weighting of the two financial measures for Executive KMP remains unchanged. The weighting of the individual objective component will be reduced. See section 4 for more detail. In competing for talent in a global market, it is critical that we have a remuneration framework that attracts and retains high quality talent to deliver on our strategy and deliver results. The Board believes that our current design meets this requirement. However, we keep this under review each year. We appreciate the feedback received from investors. As we evolve our executive remuneration framework we will continue to review our program both from a competitive design perspective and ensuring an appropriate target quantum for Executives that positions us at the median of our global pharmaceutical/biotechnology peer group. The Board will review sustainability on an annual basis to determine the appropriate weighting, measure, target and alignment to either STI or LTI. As we look to Board succession we will need to ensure our NED fee pool is set at the appropriate level. Thank you to my fellow HRRC members and thank you for supporting CSL and the patients we serve around the world. Dr Megan Clark AC Chair Human Resources and Remuneration Committee CSL Limited Annual Report 2021/22 71
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