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CIMIC Group Limited Annual Report 2016 |
Financial Report
Notes continued
for the 12 months to 31 December 2016
36. EMPLOYEE BENEFITS
a) Rights plans
Equity Incentive Plans – 2012, 2013, and 2014 Awards
Shareholder approval was obtained at the Annual General Meeting on 22 May 2012 for the Equity Incentive Plan (“EIP”). The EIP provides
the legal framework for the awards of share rights made in 2012, 2013 and 2014 under the Long-Term Incentive Plan (“LTI”), Short-Term
Incentive Plan (Deferral) (“STI”) and One-off Awards described below.
Long-Term Incentive Plan – 2012 Awards
The Long-Term Incentive Plan (“LTI”) – 2012 Awards performance share rights were granted for no cost to the employee and entitle the
participant to receive one fully paid ordinary share in the Company per right, subject to the terms and conditions determined by the
Remuneration and Nomination Committee, including vesting conditions linked to service and performance over the three year
performance period. All share rights issued expire on the earlier of their vesting date where performance hurdles are not met or
termination of the individual’s employment except in certain special circumstances.
In addition to a continuing employment service condition, the vesting is conditional on the Group achieving Total Shareholder Return
(“TSR”) (ie, growth in share price plus dividends reinvested) or Earnings Per Share (“EPS”) performance hurdles, as follows:
50% of each grant of share rights will be subject to a TSR performance hurdle (“parcel A”). The TSR hurdle requires the Company’s
TSR percentile ranking against the TSR performance of the companies comprising the ASX 100 (as at 1 January 2012) over the
performance period (from grant date to test date) to be at least at the 51
st
percentile before any parcel A share rights vest (50% vest
at threshold) then pro rata to the 75
th
percentile and then at the 75
th
percentile or greater all parcel A share rights vest; and
50% of each grant of share rights will be subject to an EPS hurdle (“parcel B”). Annual compound earnings per share growth over the
performance period must be at least 8% per annum before any parcel B share rights vest (50% vest at threshold) then pro rata to
13% per annum and then at 13% per annum all parcel B share rights vest.
Long-Term Incentive Plan – 2012 Additional Award
Additional awards of performance share rights were made under the same vesting and performance conditions as the 2012 LTI, and
measured over three, four and five year performance periods.
Amount recognised during the reporting period: Expense $0.1 million (31 December 2015: Gain $3.0 million).
2012 LTI and 2012 LTI
additional award 2012 LTI additional award 2012 LTI additional award
Date of grant
1 Jan 2012
1 Jan 2012
1 Jan 2012
Date of performance period end
1
31 Dec 2014
31 Dec 2015
31 Dec 2017
Grant fair value for TSR performance hurdle (“parcel A”)
2
$9.34
$9.22
$9.02
Grant fair value for EPS hurdle (“parcel B”)
3
$15.84
$14.93
$14.07
Original grant
565,092
21,768
21,768
Unvested rights at 31 December 2014
320,122
21,768
21,768
-
Granted
-
-
-
-
Vested
4
-
-
-
-
Forfeited/Lapsed
5
(320,122)
(21,768)
(21,768)
Unvested rights at 31 December 2015 and 31 December 2016
-
-
-
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