Directors’ Report The key features of CSL’s LTI program for our 2023 awards, granted 1 November 2022, are as follows. 8 Also maximum opportunity. 9 A s outlined in section 2.2, upon cessation of employment, Mr Perreault’s 2023 LTI PSUs will be pro-rated for the portion of the performance period employed. He will not receive his maximum opportunity. Feature Description Summary A conditional ‘right’ to a CSL share or at the Board’s discretion in exceptional circumstances, a cash equivalent payment. No price is payable by the Executive KMP on grant or vesting of rights. Shares are allocated (or cash paid) on vesting without the need for exercise by an Executive KMP Security Performance Share Unit (PSU) Grant Methodology To determine the number of PSUs issued, a five day volume weighted average share price preceding the grant date is used. The LTI opportunity for each Executive KMP is divided by the calculated allocation price to determine the number of securities granted Performance Measure and Weighting • Tranche 1 – ROIC 70% • Tranche 2 – EPSg 30% ROIC Gateway Performance Measure No vesting will occur in Tranche 1 unless an Investment Hurdle Rate (IHR) is achieved in the year of testing (30 June 2025). The IHR is the minimum return CSL requires on its investments to ensure it is making sound investment decisions and appropriately managing risk Performance Period • Tranche 1 ROIC – Seven year average 1 July 2018 to 30 June 2025 • Tranche 2 EPSg – 1 July 2022 to 30 June 2025 Performance Target • Tranche 1 ROIC – Threshold at 17.0% and Target at 18.2% • Tranche 2 EPSg – Threshold at 10.2% and Target at 14.1% Executive KMP LTI Target Opportunity8 • Dr McKenzie – 425% of FR • Ms Linton – 225% of FR • Mr Perreault – 450% of FR9 Vesting Schedule 50% earned on threshold level performance, increasing on a straight line basis with 100% earned at target level performance (maximum vesting capped at 100%). The Board has the discretion to adjust vesting outcomes Vesting Date 1 September 2025 Retesting No retest of any tranche Cessation of Employment A ‘qualified leaver’ (for example someone who retires or is made redundant) retains a pro-rated number of PSUs based on time elapsed since grant date. Retained PSUs will remain subject to original terms and conditions including satisfaction of performance conditions at the test date. If an Executive KMP is not a ‘qualified leaver’, all unvested PSUs will lapse unless the Board determines otherwise Change of Control In the event of a change of control, the Board, in its absolute discretion, may determine that some or all of the PSUs vest having regard to the performance of CSL during the performance period to the date of the change of control event. Vesting may occur at the date of the change of control event or an earlier vesting date as determined by the Board Dividends and Voting Rights No dividends or dividend equivalents are paid on unvested PSUs. Executive KMP are only eligible for dividends once shares have been allocated following vesting of any PSUs. PSUs do not carry any voting rights prior to vesting and allocation of shares Malus and Clawback LTI arrangements are subject to malus and clawback provisions that enable the Board to adjust unvested and vested awards as appropriate. The circumstances include material misstatement or omission in financial statements, fraud, dishonesty, adverse risk management outcomes, violation of any material law or regulation, material violation of CSL’s Code of Conduct or any other policy governing the conduct of employees or any other serious and wilful misconduct. See section 9 for further details on CSL’s Malus and Clawback Policy CSL Limited Annual Report 2022/23 94
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