Remuneration Report 2019

Remuneration report continued The positive discretionary adjustment of 10% applied to the formula above was provided to reflect the better than anticipated outcomes of the disposal process of discontinued operations. This adjustment was considered in the context of the 15% discretionary penalty applied for the UK CD business in 2017 and 2018. The calculation of the HEPS growth and ROFE achievements was based on the results for continuing operations. 4. Short-term incentives 2020 STIs for executive directors will be based on similar principles to the 2019 STI plans. A combination of the following performance measures will be used: • • Earning performance will be measured on a linear basis for real constant currency HEPS performance (50,0% weighting) from the threshold (2,5% real growth), target (5% real growth) and stretch (7,0% real growth). • • ROFE (30,0% weighting) has a threshold of 40,0%, a target of 45,0% and a stretch of 50,0% achievement (excluding the impacts of IFRS 16 and investment properties). • • KPIs (20,0% weighting) include performance on staff development, innovation, acquisitions, improving performance of laggard operations, etc. While more subjective in character, these will also be evaluated on a threshold, target and stretch basis. Bonuses to be paid in terms of the aforementioned scheme will have a maximum cap of 160% of individual CTC packages which could only be attained at full stretch performance on all criteria. 5. Long-term incentives Awarded in 2019 CSP awards were granted on December 7 2018 and performance conditions are measured over the period July 1 2018 to June 30 2021. Vesting of 75% of the awards will occur post-September 2021 and the remaining 25% will vest post-September 2022. The following performance targets, weighting and performance periods are applicable to the 2019 CSP awards and are to be tested over a three-year performance period: Performance conditions and weighting Detail of performance conditions Vesting profile Actual targets HEPS growth (50%) Three-year real constant currency HEPS growth in excess of Bidcorp inflation. HEPS targets are set by reference to the company’s three-year plan and market expectation. The committee considers the targets to be critical to the company’s long-term success and its ability to maximise shareholder value, and to be in line with the strategic goals of the company. In addition, the committee considers these targets to be sufficiently demanding with significant “stretch”, ensuring only outstanding performance will be rewarded with a maximum pay-out. HEPS: • • Below threshold – 0% vesting • • At threshold – 30% vesting • • Target – 60% vesting • • Stretch – 100% vesting, where linear vesting will occur between the levels stated above. HEPS targets: Achievement of real constant currency HEPS for period ending June 30 2021: • • Threshold – 2,5% per annum real constant currency HEPS growth over the three-year performance period • • Target – 5,0% per annum real constant currency HEPS growth over the three-year performance period • • Stretch – 8,0% per annum real constant currency HEPS growth over the three-year performance period. 7 / Bid Corporation Limited Remuneration report 2019