31
CIMIC Group Limited Annual Report 2016 |
Remuneration Report
The following table sets out the outcomes for the 2016 Financial Year for each Senior Executive who participated in the 2016 STI.
Percentage of available STI earned
1
Senior Executives
STI earned (A$)
Percentage of target STI
Percentage of maximum STI
Current
A Valderas
1,631,250
2
145
96.7
A Muriel Bernal
1,125,000
3
150
100
1.
In consultation with the Remuneration and Nomination Committee, the threshold, target and stretch values for all of the financial KPIs are approved
by the Executive Chairman.
2.
For Mr Valderas, this STI award was approved by the Board, on the recommendation of the Remuneration and Nomination Committee, on 7 February
2017 and is payable in April 2017.
3.
For Mr Muriel Bernal, this STI award was approved by the CEO, with the consideration of the Remuneration and Nomination Committee, on 30
January 2017 and is payable in April 2017.
LTI
There was no LTI grant in 2016. The table below provides a summary of the 2015 LTI currently on foot.
Summary of 2015 LTI grants
Senior Executive
participation
Mr Valderas and Mr Muriel Bernal participated in the 2015 LTI. Mr Fernández Verdes did not participate in
the LTI.
What are the vesting
conditions and why
were they chosen?
Options will vest over a 2 year performance period, subject to the Senior Executive’s continued
employment with the CIMIC Group. The options have an in-built performance hurdle, being the exercise
price of the options, meaning that at the time of exercise, the market price of CIMIC shares must be above
the exercise price of the options before the Senior Executive can derive any benefit from the award. Details
of the exercise price calculation are set out in ‘Note 36: Employee benefits’ to the Financial Report within
this Annual Report. This structure was selected to provide participants with a clear line of sight as to the
targets that must be satisfied, and a stronger alignment between individual performance and vesting
outcomes, ensuring a Group-wide focus on sustained growth and Group prosperity.
When are the
options available to
exercise?
The options vest 2 years after the grant date, and are available to exercise for a period of 3 years subject to
the discretion of the Remuneration and Nomination Committee. The Senior Executive is permitted to
exercise up to 40% of their vested options in each of the first 2 years after vesting and the remaining
unexercised portion in year 3 of the exercise window. Any options that remain unexercised at the end of
the exercise window (ie, 5 years after the grant date) will expire. The most recent options awarded, being
the 2015 awards, are scheduled to vest on 29 October 2017, with any vested options that remain
unexercised expiring on 29 October 2020.
Do the options
attract dividends and
voting rights?
The options do not carry any rights to dividends or voting. Shares allocated upon exercise of options rank
equally with other ordinary shares on issue.
What happens if
there is a change of
control?
If a change of control occurs, the Board may determine whether, and the extent to which, any unvested
options will vest, having regard to all relevant circumstances including performance to-date and the nature
of the change of control.
What if a Senior
Executive ceases
employment?
If a Senior Executive resigns or is summarily terminated, any vested but unexercised and any unvested
option grants will lapse. Generally, if a Senior Executive leaves due to any other circumstances (eg,
retrenchment or genuine redundancy):
-
a
pro rata
portion of the Senior Executive’s unvested options will remain on foot following his or her
termination and vest subject to the original conditions of the award (with the balance lapsing); and
-
any vested but unexercised options held at the date of cessation of employment will remain on foot
until the expiry date, subject to the same restrictions on exercise as if the Senior Executive had
remained with the Group.
In these circumstances, any entitlement on exercise will be paid in cash based on the share price at the date
of exercise, less the exercise price and all applicable taxes and levies. The Remuneration and Nomination
Committee retains authority to exercise discretion on leaver treatment for Senior Executives.
Can Senior
Executives hedge
their risk under the
option plan?
No. The Group’s Securities Trading Policy (consistent with the Corporations Act) prohibits Senior Executives
from entering into hedging arrangements regarding both vested and unvested securities, which includes
options.
31
