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APN
annual report
2011
remuneration report
APN News & Media Limited and Controlled Entities
EPS tranche (75% of total annual award)
TSR tranche (25% of total annual award)
Performance
conditions
Performance
period
The number of Rights that vest is dependent on performance over a three year period. Any awards which
do not vest when performance is tested (at the end of the three year performance period) will lapse.
Performance
measures
EPS has been chosen as it focuses participants on
earnings growth. EPS is the base earnings per share
(as disclosed in the Company’s Income Statement)
adjusted for any non-recurring or non-trading items
as determined by the Board. EPS growth will be
measured as the annual compound percentage
increase in EPS over three consecutive financial
years beginning the year in which the Rights
are granted.
Relative TSR has been chosen as a performance
hurdle because it aligns executive interests with those
of shareholders by measuring the change in the
Company’s share price and the payment of dividends.
The Company’s TSR performance will be
measured relative to constituents of the Global
Industry Classification Standard (GICS) Consumer
Discretionary Index at the date of grant. The
GICS Consumer Discretionary Index was chosen
as the companies in the peer group operate in
similar industries to the Company and face similar
challenges, opportunities and market conditions.
Therefore, the Company must outperform companies
with similar opportunities to receive any benefit in
relation to the TSR-based tranche of awards.
In order for any of the TSR-based portion of the
award to vest, APN’s TSR must be at or above the
51st percentile of the comparator group’s companies’
TSRs over the three-year performance period.
Vesting
schedule
For awards granted in 2011 the EPS targets are:
Compound annual
EPS growth
Proportion of
EPS grant vesting
Less than
7% per annum
0%
At least equal to
7% per annum
50%
Between
7% and 10% per annum
Pro-rata
straight line
At least 10% per annum 100%
The TSR vesting schedule is as follows:
Relative TSR
percentile ranking
Proportion of Rights that will
vest if the TSR hurdle is met
Less than the
51st percentile
0%
51st percentile
50%
Between the
51st and 75th percentile
Straight line vesting
between the
51st and 75th percentile
75th percentile
100%
Treatment of awards on
cessation of employment
The plan rules will allow flexibility for participants to remain in the plan post cessation of employment
or for awards to be pro-rated for time and performance up to the date of cessation.
For the initial grants where participants leave in certain “good leaver” circumstances, awards will be
pro-rated for time and may vest to the extent performance hurdles are met as at the date of termination.
For the CEO, annual awards that have been granted may vest on termination, to the extent that the
performance hurdles are met, other than in certain “bad leaver” circumstances.
Treatment of awards
on change of control
The Board will have discretion to pro-rate outstanding awards for time and performance in an event which
the Board considers to be a change of control event.
A change of control event is defined in the LTI plan rules.
C: Executive remuneration – detail (continued)