Remuneration Report 2019

Remuneration report continued Component Objective and practice Link to business strategy Policy Changes for 2020 Short-term incentives (STI) STI To motivate and incentivise delivery of performance over the one-year operating cycle. Bonus levels and the appropriateness of measures and weightings are reviewed annually to ensure that these continue to support Bidcorp’s strategy. The annual bonus is paid in cash in August/September each year in respect of the group financial performance during the previous financial year. Encourages growth in headline earnings per share and return on funds employed (ROFE) for shareholders in a sustainable manner over the short term. Combines the above company financial performance metrics with strategic metrics, such as leadership, to ensure well balanced KPIs. Rewards executive directors for their measurable contribution to the group based on predetermined metrics. For the 2019 financial year, target and stretch performance targets were set for the following metrics: Company financial performance • • Constant currency real headline earnings per share (HEPS) growth; and • • ROFE achieved. Measured against prior year’s performance and budgets. Strategic objectives Non-financial, strategic objectives, such as leadership, are also considered to determine the quantum of bonuses paid. Earning potential • • At target performance, the earning potential is 100% of guaranteed package. • • Stretch earning potential is limited to 160% of guaranteed package and is subject to exceptional performance. Discretion of committee The committee has discretion, when warranted by exceptional circumstances and where considerable value has been created for shareholders and stakeholders of Bidcorp by specific key employees, to award special bonuses or other ex gratia payments to individuals. In exercising this discretion the committee must satisfy itself that such payments are fair and reasonable and are disclosed to shareholders as required by remuneration governance principles. Clawback conditions introduced. Long-term incentives (LTI) LTI – CSP To motivate and incentivise delivery of sustained performance over the long term. Alignment of executives’ interests with shareholders through conditional rights to future delivery of equity. Vesting of equity instruments are subject to performance targets, thereby supporting the performance culture of the group. Motivates long-term, sustainable performance. Award levels are set according to best practice benchmarks and to ensure support of group business strategy. Awards consist of conditional rights to shares, subjected to performance conditions over a three-year performance period and continued employment period for the duration of the vesting periods of three years (75% of the award) and four years (25% of the award) respectively. The company performance metrics comprise the following: • • constant currency HEPS growth; • • relative total shareholder return (TSR) as external performance measure; • • ROFE; and • • KPIs. Malus and clawback conditions introduced. Bid Corporation Limited Remuneration report 2019 / 4