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Remuneration Report
Vesting and forfeiture history Prior to 2017, the ELSS performance criteria consisted of both relative TSR and an earnings per share (EPS) target. The vesting and forfeiture of shares (due to failure to meet performance criteria) over the last five years is set out in the following table: Date of grant Shares granted 1 Shares vested Shares forfeited EPS Target October 2017 890,075 N/A October 2016 905,221 70.1 – 76.3 October 2015 3,208,083 50% 2 67.1 – 73.1 October 2014 815,164 0% 50% 3 61.0 – 66.4 October 2013 771,038 50% 50% 55.1 – 63.4 Minimum shareholding requirement Over time, executives and senior managers must acquire and maintain a holding in the Company’s ordinary shares until such time as the greater of the sum invested or the market value of their shareholding exceeds 50% of their base remuneration. The Company believes this shareholding requirement strengthens the alignment of executives and senior management with the interests of shareholders and puts their own remuneration at risk to long-term Company performance. In addition, for the chief executive officer and his direct reports, if at the time of appointment to an executive role, the greater of the market value or cost of the individual’s shareholding is less than the value of 10% of their base remuneration, the executive is required to apply no less than 25% of the after-tax value of any STI payment to acquire shares in the Company on or before 31 March of the following financial year. This requirement applies for the first two years of employment as an executive. FBuShare FBuShare is a broad-based employee share plan that aims to promote employee engagement and retention. Employees acquire shares in the Company and, if they continue to be employed after a three year qualification period, they become entitled to receive one award share for every two shares purchased in the first year of the qualification period and still owned at the end of that period. FBuShare does not require any performance criteria to be met. FBuShare has a maximum contribution rate of NZ$5,000 per annum (or the equivalent currency in other countries). Directors are not eligible to participate in FBuShare. Chief executive officer’s remuneration 1 Ross Taylor’s annual base salary as at 30 June 2018 was $2,000,000. The remuneration he received for the period 22 November 2017 to 30 June 2018 comprised: 1 Of the shares granted 1,061,652 shares were forfeited on Mark Adamson’s cessation of employment. 2 The October 2015 EPS tranche was forfeited in 2018. 3 The 2014 EPS tranche was forfeited in 2017 and the TSR tranche was extended to 30 September 2018.
Base remuneration
$1,219,743
Other benefits*
$45,917
* Includes relocation and medical insurance premium.
The following short-term variable incentive was accrued in the current year:
Short term variable incentive (STI) FY18 – accrued and payable in September 2018
$1,463,885
The following long-term variable incentive was granted during the year:
Executive long-term share scheme (ELSS) 2017
182,561 2
$2,000,000
Refer above under ‘Executive and Senior Management Remuneration’ for details of the STI and ELSS.
1 Details of the remuneration paid in FY18 to Mark Adamson, whose employment as chief executive officer ceased on 20 July 2017, are contained in the Company’s 2017 annual report (total $2,936,387). In addition, Francisco Irazusta performed the role of interim chief executive officer from 24 July 2017 until 21 November 2017. In recognition of Francisco’s additional responsibilities during the interim period, he received an acting allowance as part of his base remuneration. The financial and individual targets for Francisco Irazusta’s STI during this period were also aligned to Fletcher Building Group targets, and his STI target opportunity was adjusted accordingly to reflect the additional accountability for that period.
2 Based on a share price of NZ$7.34, being the volume weighted average price for the five business days following the 2017 annual shareholders’ meeting on 25 October 2017.
108 Fletcher Building Limited Annual Report 2018
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