Page 24 - Suncorp_Review

22

2. Remuneration – audited (continued)

2.3 Remuneration components (continued)

Group CEO’s LTI terms

The performance period and some other minor terms of the Group CEO’s LTI award are different from the Senior Executives’ awards. Details of these differences are set out in section 2.6 of this report. Hedging prohibition

The Suncorp Group’s securities dealing policy extends to dealing in a fnancial product which operates to limit the economic risk of a holding in the Company’s securities, including unvested EPSP performance rights.

Dealing in these types of fnancial products is prohibited unless the transaction has been approved by either the Chairman (for directors) or the Group CEO (for Senior Executives) and the security is not an unvested EPSP performance right. All KMPs are reminded of this policy at least twice per year, usually in the month prior to the release of the Suncorp Group’s annual and half‑year fnancial results, and are required to declare on an annual basis that they have not hedged any unvested equity exposure to the Suncorp Group.

While performance rights remain unvested, SLT members do not have an entitlement to the shares underlying the performance rights and the underlying shares are held in the name of the EPSP trustee. During this time the underlying shares therefore cannot be accessed by the individual.

Once performance rights have fully vested under the EPSP, the Chairman or Group CEO (as appropriate) must be notifed when the underlying shares are withdrawn from the EPSP, including details of how the individual intends to deal in the shares once they are released.

2.4 Remuneration and the link to performance

Remuneration is structured to motivate performance as well as to attract and retain talented employees. The portion of ‘at‑risk’ variable remuneration received by the SLT is dependent on achieving superior performance (both at an individual and Suncorp Group level) and generating value for shareholders.

In 2011 the Suncorp Group has not achieved target fnancial performance and the value of STI to be delivered has therefore been reduced. In respect of LTI, the performance hurdle has not been met therefore no value will be delivered to the SLT in offce at 30 June 2011. Suncorp Group performance

The operating and fnancial review in section 6 of the Directors’ Report provides an analysis of the Suncorp Group’s performance in 2011.

The table below includes a number of indices refecting the Suncorp Group’s 1 performance over the fve years to 30 June 2011. The intention is to provide an overall view of the Suncorp Group’s performance (the TSR in the table does not relate to the Suncorp Group’s LTI plan which is dependent on relative TSR performance against a peer group of ASX‑listed companies).

YEAR ENDED 30 JUNE

SHARE PERFORMANCE EARNINGS PERFORMANCE

CLOSING SHARE

PRICE 2 ($)

DIVIDEND P/SHARE

(CENTS) TSR 3

BASIC EPS (CENTS)

PROFIT FOR THE YEAR ($M)

RETURN ON EQUITY FOR THE YEAR

(%)

2011 8.14 35 63 35.6 457 3.2

2010 8.04 35 60 61.8 789 5.7

2009 6.70 40 48 31.6 353 2.7

2008 13.04 107 82 60.2 588 4.7

2007 20.17 107 119 158.6 1,064 8.6

1 The Suncorp Group completed a restructure on 7 January 2011. Amounts prior to this restructure relate to Suncorp‑Metway Ltd, the ultimate parent entity prior to the restructure. 2 Closing share price at 30 June.

3 TSR is based on the closing share price as at 30 June relative to the share price at the commencement of the fve year period commencing 1 July 2006. To have achieved a value of 125 at 30 June 2011, this means an initial capital investment of $100 in Suncorp shares on 1 July 2006, together with reinvested dividends over the ensuing fve year period, would be worth $125 at 30 June 2011.

Suncorp Group performance and short‑term incentives

The Suncorp Group met certain short‑term Suncorp Group and individual performance objectives during 2011, which resulted in value being delivered to the SLT under the STI program at an average of 58% of total realisable STI maximum.

Directors’ Report (continued)