Directors’ Report
3.5 FY24 Long Term Variable Remuneration (LTVR) Plan
A description of the LTVR structure applicable for FY24 is set out below: Purpose
To provide at-risk remuneration and incentives that reward executives for meeting long-term value creation targets specified by the Board at the start of the financial year, and to align executives' interests with those of shareholders. The LTVR is in the form of Performance Rights with a nil Exercise Price, which are subject to performance and service vesting conditions.
Instrument
Measurement Period Opportunity
1 July 2023 to 30 June 2027 (4 Years)
Opportunity as % of Fixed Pay Target LTVR
Managing Director Other executives
100% - 120% 50%-70%
Grant Calculation, Performance Metric and Vesting Scale
The number of Performance Rights in a Tranche of FY24 Target LTVR granted for the issuance was calculated via the application of the following formula: Target LTVR $ ÷ Right Value where Right Value is the share price aligned to the LTVR target TSR share price. Vesting is based on the Company’s performance against two equally-weighted conditions, being a vesting scale based on the share price range of $0.78 - $0.84 ( TSR ); and an Embedded Value range of $620m - $680m. The TSR target was selected to ensure that the overall remuneration framework contains a balance of internal and external measures, such that the STVR is based on a set of internal measures to drive business plan outcomes and the LTVR is based on longer term measures aligned with shareholder value creation - a combined TSR and embedded value outcome has been adopted to achieve this outcome. Nil vesting occurs if the performance condition is not met. In addition to the Target LTVR, the MD was also granted an additional tranche of LTVR (‘Tranche 2 (Stretch)’) with vesting based on equally-weighted conditions a TSR measure of $1.00; and an Embedded Value of $690m. The measures operate independently but there is no award if a measure is not achieved, and no pro rata applies.
Re-testing Settlement
No re-testing facility is available under the CWL Rights Plan Rules.
The Performance Rights are “Indeterminate Rights” which may be settled in the form of a Company Share (including a Restricted Share), or cash equivalent, upon valid exercise. It is generally expected that Shares will be used. Performance Rights have a term of 15 years from the grant date and if not exercised within the term the Performance Rights will lapse. In the event of delisting the vesting conditions set out in the invitation will cease to apply and unvested rights will vest in accordance with the terms of the LTVR rules set out in the CWL Rights Plan (as updated from time to time). In the event of other change of control events, vesting conditions continue to apply and any changes will be subject to the Board’s absolute discretion.
Term
Delisting and Corporate Action
Cessation of Employment Vested Performance Rights will be automatically exercised. Unvested Performance Rights will lapse except in circumstances such as death, total or permanent disability, genuine redundancy or other circumstances determined by the Board in its discretion (Qualifying Cessation). Performance Rights that do not lapse at the termination of employment will continue to test for vesting at the end of the Measurement Period. Board Discretion The Board has discretion to adjust the number of Performance Rights that ultimately vest
if it forms the view that the unadjusted outcome is not appropriate to the circumstances that prevailed over the measurement period and/or to the contribution of a Participant to outcomes over the measurement period. 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 LTVR Plan.
Malus and Clawback
63
ClearView Wealth Limited
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