3.5 Long-Term Incentive CSL’s LTI design is intended to focus on the sustainable long-term growth of the organisation, delivering returns to CSL shareholders and aligning executives’ equity interests with those of shareholders. The key features of CSL’s LTI program for FY25 awards, granted 1 September 2024, are as follows. Feature Description Performance Period Three years from 1 July 2024 to 30 June 2027 Delivery PSU, being a conditional ‘right’ to a CSL share. No price is payable by the Executive KMP on grant or vesting of rights. Shares are allocated on vesting without the need for exercise by an Executive KMP Performance Measures and Weightings ‒ T hree-year average ROIC (70%) ‒ T hree-year EPS growth (30%) These two financial performance measures and the targets below have been chosen as the Board believes they drive the success of the organisation and drive shareholder value given the capital intensive nature of CSL’s businesses Calculation ‒ R OIC: Reported EBIT x (1–Effective Tax Rate)/(Average Equity + Average Net Debt) where Net Debt equals interest-bearing liabilities, less cash, and Average Equity and Average Net Debt is the average of the opening position on 1 July and closing position on 30 June of the respective financial year ‒ E PS: CSL’s reported net profit after tax in USD/Weighted average number of shares on issue Approach to Performance Target Setting When determining performance targets the Board considers a range of factors including: ‒ CSL’s strategy; ‒ B udget and forecast financial performance from CSL’s long range plan; ‒ H istorical financial performance; and ‒ E xternal factors including market guidance and any other relevant market disclosures. Sensitivity analysis and modelling is undertaken to test both the threshold and target values selected to create ambition and sufficient stretch, and alignment with shareholder interests. Performance Targets and Vesting Schedule ROIC CSL’s ROIC Performance Vesting Outcome Below 11.1% 0% Equal to 11.1% 50% Greater than 11.1% and up to 12.3% Straight-line vesting between 50% and 100% At or above 12.3% 100% EPS growth CSL’s EPS Performance Vesting Outcome Below 12.4% 0% Equal to 12.4% 50% Greater than 12.4% and up to 13.8% Straight-line vesting between 50% and 100% At or above 13.8% 100% Vesting Date 1 September 2027 Holding Lock Period 1 September 2027 to 31 August 2028 Grant Methodology ‒ T o determine the number of PSUs issued, a five day volume weighted average share price preceding the grant date is used (allocation price9) ‒ T he LTI opportunity for each Executive KMP is divided by the allocation price to determine the number of securities granted Retesting No retest Dividends and Voting Rights ‒ N o dividends or dividend equivalent payments are paid on unvested PSUs. Executive KMP are only eligible for dividends once shares have been allocated following vesting of any PSUs ‒ P SUs do not carry any voting rights prior to vesting and allocation of shares Remuneration Report 9. For Dr McKenzie the allocation price was the price determined for the grant made on 1 September 2024, not at the date of Dr McKenzie’s grant following the 2024 AGM. 72 Directors’ Report
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