7. Remuneration in 2024 7.1 Executive KMP Remuneration Changes in 2024 CSL competes for talent in a global market and we need to attract and retain high calibre executives in a highly competitive global pharmaceutical and biotechnology industry. The unique skill set with specialised pharmaceutical and biotechnology expertise and experience that CSL requires is critical to enable the company to deliver on its strategy, promise to patients and deliver sustainable returns to shareholders. The Board determines any increases to reward for Executive KMP based on position in market with the pharmaceutical/ biotechnology peer group, individual performance, role responsibilities and internal relativity. When comparing Executive KMP TDC to the reward of peers within the pharmaceutical/biotechnology peer group, all lag the median – specifically on the LTI component – resulting in TDC that is below the median. 2024 Target Remuneration – P McKenzie In 2024, the Board has determined that Dr McKenzie will receive a 3.5% increase to FR, resulting in a 1 September 2023 figure of US$1,811,250. There will be no change to the STI or LTI targets, remaining at 120% and 425% of FR respectively. Dr McKenzie’s TDC will be US$11,682,563 and this is a position of 74% against the median TDC of the pharmaceutical/ biotechnology peer group. 2024 P McKenzie Target Remuneration and Peer Group Comparison – US$ 15,718,130 11,682,563 11,860,428 7,697,813 2,289,345 2,173,500 1,653,372 1,811,250 ● P McKenzie ● Peer Group CEO – median 2024 Fixed Reward 2024 STI Target 2024 LTI Target 2024 Total Target Direct Compensation 2024 Target Remuneration – J Linton In keeping in line with the approach taken for all Executives, in 2024, the Board has determined that Ms Linton will have an increase to FR only. Effective 1 July 2023, Ms Linton’s FR will be increased by 0.45% for the Australian superannuation guarantee increase from 10.5% to 11% and from 1 September 2023 will be increased by 3.5%. There will be no change to STI and LTI targets resulting in a TDC of US$3,978,203. The change for 2024 positions Ms Linton at 70% of the median TDC of the pharmaceutical/biotechnology peer group. 2024 J Linton Target Remuneration and Peer Group Comparison – US$ 5,700,680 3,978,203 4,168,225 2,106,108 990,093 936,048 977,818 936,048 ● J Linton ● Peer Group CFO – median 2024 Fixed Reward 2024 STI Target 2024 LTI Target 2024 Total Target Direct Compensation Table 13 sets out the changes to Executive KMP reward for 2024 (effective 1 September 2023) and a comparison with the changes made for 2023 (effective 1 September 2022). Table 13: Changes to Executive KMP Reward 2023 and 2024 Executive Year % change in FR % change in STI $ opportunity at target % change in LTI $ opportunity at target Total Reward Adjustment % Total Reward Adjustment US$ P McKenzie 2024 3.50% 3.50% 3.50% 3.50% 395,063 2023 3.50% 3.50% 25.68% 17.61% 950,669 J Linton 2024 3.95% 3.95% 3.95% 3.95% 151,168 2023 3.70% 22.29% 33.65% 22.72% 769,592 Former Executive KMP P Perreault 2024 – % – % – % – % – 2023 3.50% 3.50% 16.44% 11.85% 1,324,696 7.2 LTI Framework Changes in 2024 In 2024, a change to the EPS calculation will be introduced. NPAT will be replaced by NPATA as the Board believes this measure provides shareholders with improved transparency of the underlying performance of CSL and aligns with the profit measure being provided as financial guidance externally and, also used to determine the dividend and STI outcomes. The Board values and has listened to the investor feedback received and will be amending the ROIC performance period and target setting approach. From 2024, this will move from a seven year performance period (four year look back/three year forward look) to three year forward looking. This forward looking performance period is also in line with market practice across our global pharmaceutical/biotechnology peer group and aligns with the approach taken on the EPS hurdle. The ROIC gateway performance measure, which was previously introduced to address concerns about the impact of the four year look back, will not apply to the three year forward looking ROIC metric. The Board will continue to review the types of equity delivered under our LTI program and will also review target LTI quantum for Executive KMP so that CSL can continue to attract and retain global talent and remain competitive with our global peers. Subsequent to the publication of this letter on 15 August 2023, the Board has made the decision not to adjust the EPS measure for LTI awards to be granted in 2024. The EPS measure will continue to use NPAT as opposed to NPATA. CSL Limited Annual Report 2022/23 103
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