Transurban Corporate Report FY25 Remuneration report
Vesting
Following the end of the performance period, the performance measures are tested, and the Board assesses the LTI outcome. TSR component The Group uses an independent report that sets out the Group’s TSR growth and that of each company in the bespoke comparator group. A VWAP of securities for the 20 trading days up to and including the testing date is used to calculate TSR. The level of TSR growth achieved by the Group is given a percentile ranking in relation to the Group’s performance compared to the performance of other companies in the comparator group (the highest-ranking company is ranked at the 100th percentile). The TSR performance is tested at the end of the performance period, and this ranking determines the extent to which performance awards subject to this component vest. Following testing, any awards that do not vest lapse, and any awards that vest are automatically exercised into Transurban stapled securities or settled in cash at the discretion of the Board. No price is payable on exercise. TSR vesting schedule The TSR component of performance awards vest on a straight-line basis in accordance with the following table: The Group’s relative TSR ranking in the comparator group At or below the 50th percentile % of performance awards that vest Zero Above the 50th percentile but below the 75th percentile Straight line vesting between 50 and 100 At or above the 75th percentile 100 FCF component The Group’s FCF 1 per security percentage growth rate is calculated over the four-year performance period3. The FCF per security component of performance awards granted will vest based on the Group’s compound annual growth targets translated into annual FCF (excluding Capital Releases) per security over the four-year performance period. The Board uses its discretion to determine whether the performance awards are settled in Transurban stapled securities or a cash payment of equivalent value. Following testing, any awards that do not vest, lapse and any awards that vest are automatically exercised into Transurban stapled securities or settled in cash at the discretion of the Board. No price is payable on exercise. FCF vesting schedule FCF per security over the performance period Below minimum threshold % of performance awards that vest Nil Minimum threshold and maximum target Straight line vesting from 50 and 100 At or above maximum target 100 If employment ceases due to resignation or for cause before the performance measures are tested, generally there is no entitlement to unvested performance awards and any unvested awards will lapse, unless the plan rules provide otherwise, or the Board otherwise resolves. If employment ceases in other circumstances (‘good leaver’), unless the Board determines otherwise, a pro rata number of unvested performance awards (calculated based on the portion of the performance period that has elapsed) will remain on foot and subject to the original terms and will be tested for vesting in the ordinary course.
1
Cessation of employment
Clawback
Same treatment as per STI
Minimum security holding The Board has endorsed minimum security holding guidelines for Non-executive Directors, the CEO and Executive KMP. The guidelines recommend that Non-executive Directors, the CEO and Executive KMP build and maintain a minimum security holding of Transurban stapled securities equal to 100% of their fixed remuneration or base fees (excluding superannuation). The minimum stapled security holding can be accumulated over a five-year period. All KMP have either achieved their minimum security holding or, for those new to the Group, are on track to meet the five year accumulation period.
Service agreements The remuneration and other terms of employment for the CEO and other Executive KMP are formalised in service agreements that have no specified term. Under these agreements, the CEO and other Executive KMP are eligible to participate in STI and LTI plans. The notice periods in place for FY25 are outlined below:
Period of notice to terminate by the Executive KMP
Period of notice to terminate by the Group 2
CEO
6 months 3 months 6 months
12 months 6 months 6 months
Other Executive KMP
Other Executive KMP – commencing post 6 Oct 2020
1 References to FCF in relation to FY25 LTI Plan exclude Capital and Cash Reserve Releases 2 Payment in lieu of the notice period may be provided (based on the executive’s fixed remuneration). The Group may also terminate at any time without notice for serious misconduct
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