Remuneration Summary

Our Executive Reward Strategy considers the interests of both internal and external stakeholders and aims to drive strong individual and team performance.

The reward strategy is implemented through four guiding principles: simplicity, responsiveness, balance, governance and risk management. We focus on aligning rewards and sustainable performance. Accordingly, the strategy requires that a significant portion of an individual’s remuneration be ‘at risk’, and be tied to clear metrics.

Our remuneration framework consists of three key components:

  • Fixed Remuneration – which provides base salary and benefits which are competitive with those provided by companies of a similar size and level of complexity;
  • Short Term Incentives (STIs) – which provide awards only where executives perform well against Key Performance Indicators (KPIs) in scorecards. A significant portion is deferred and delivered in Lend Lease securities; and
  • Long Term Incentives (LTIs) – which are designed to motivate Senior executives to achieve Lend Lease’s long term strategic goals and provide alignment with securityholders’ interests.

The Board continually considers the Group’s Executive Reward Strategy and during the past year reviewed the strategy, bearing in mind market practice and stakeholder feedback, to determine its suitability as we move into the ‘Lead’ phase of our strategy. As a result of the review, changes made commencing in either the 2013 or 2014 financial years included items such as:

  • Extending the vesting period for the CEO’s STI to three years and capping the cash proportion of the CEO’s STI at $800,000 as an interim measure for 2013, pending the more comprehensive review being undertaken;
  • Implementing malus provisions for the CEO and other Senior executives in relation to both deferred STI and LTI awards;
  • Agreeing a new contract with the CEO which includes a reduction to the CEO’s total target remuneration package effective from 1 September 2013;
  • Changing the remuneration mix to reduce the emphasis on STIs and place greater emphasis on LTIs;
  • Deferring a greater proportion of ‘above target’ STI awards for the CEO and Senior executives; and
  • Introducing a second performance hurdle, Return on Equity for LTIs.

  • Fixed remuneration includes the contractually awarded amount of Total Package Value (including the value of car and car parking benefits) from 1 September 2012 as outlined in section 3b of the Remuneration Report in the 2013 Annual Consolidated Financial Report.

  1. Other benefits include professional fees and reimbursements of the cost of travel, accommodation and subsistence.
  2. Directors have superannuation contributions paid on their behalf in accordance with superannuation legislation.
  3. J A Hill retired 15 November 2012.