Directors’ Report
3.4 FY24 Short Term Variable Remuneration (STVR) Plan
A description of the STVR structure applicable for FY24 is set out below: Purpose
To provide at-risk remuneration and incentives that reward executives for meeting annual goals. The objectives chosen are intended to assist long-term shareholder value development and are linked to the long-term strategy on an annual basis.
Measurement Period Opportunity
The financial year of the company (1 July - 30 June).
Opportunity as % of Fixed Pay Target
Stretch
Managing Director Other executives
50% 30%
60% 36%
Outcome Metrics and Weightings
For FY24, the following metrics and weightings applied: • Financial Measures: including: Group Underlying Net Profit After Tax 1 , Gross Premium Income and Cost to Income ratio - 30% • Non-financial Measures: Business Targets - 70% including: • Customer • Transformation, simplification and employee engagement • Risk management and compliance • Shareholder management and engagement These metrics were selected because they were viewed by the Board as being the key drivers of value creation, as applicable to the role, for FY24. Refer to the section “The Link Between Performance and Reward for FY24” for additional information regarding performance outcomes relative to target.
Gate
The following Gate openers applied for FY24: • Risk Management • Culture and Values
Award, Settlement and Deferral
Awards will be calculated and settled following the auditing of the accounts. 60% of any STVR Award is to be paid in cash, 40% of any STVR Award is to be settled in the form of a grant of Restricted Rights subject to an exercise restriction ending on 30 June 2027. Any grant of deferred STVR Restricted Rights will be calculated based on the 90-day VWAP leading up to the end of the FY24 performance period. In the event the Board determines that the Company will be subject to a de-listing, any unvested restricted rights may be subject to an accelerated vesting date in the Board’s absolute discretion. The Board has sole discretion to determine that some or all unvested restricted rights held by a participant lapse on a specified date if allowing the rights to be exercised would, in the opinion of the Board, result in an inappropriate benefit to the participant. This is intended to give effect to the Company’s approach to Malus and Clawback. In the event that the Board forms the opinion that a Participant has committed an act of fraud, defalcation or gross misconduct in relation to the Company then the Participant will forfeit all unvested entitlements under the STVR plan, including all unvested restricted rights.
Delisting and Corporate Action
Board Discretion
Malus and Clawback
1 Underlying NPAT (from continuing operations) continues to be adopted by the Board as its key measure of Group profitability and basis for dividend payment decisions. It is used as a non IFRS measure of earnings that excludes the impacts of market and interest rate volatility, with the definition updated to reflect the application of AASB 17. Underlying NPAT (from continuing operations) has been defined as the consolidated profit after tax excluding the effects of economic changes on both the AASB 17 insurance contract liability and the incurred income protection disabled lives reserves, the (non-cash) impairment of the asset for acquisition cash flows (AIACF), changes in the loss component that is predominantly driven by the level premium business, current year timing impacts of assumption changes on the contractual services margin and any costs considered unusual to the Group’s ordinary activities. Underlying NPAT includes the amortisation of capitalised software and leases, underlying investment income (the portfolio carry yield on the investment portfolio and interest rate earned on physical cash holdings), costs associated with the incurred claims reinsurance treaties and interest costs associated with corporate debt and Tier 2 Capital.
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ClearView Annual Report 2024
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