2012 Annual Report - Hong Kong Monetary Authority

REMUNERATION REPORT (continued)
5. Remuneration Strategy and Objectives
ANZ’s remuneration strategies and initiatives shape the Group’s
Remuneration Policy, which is approved by the Board. The following
principles underpin ANZ’s Remuneration Policy, which is applied
globally across ANZ:
creating and enhancing value for all ANZ stakeholders;
emphasis on ‘at risk’ components of total rewards to increase
alignment with shareholders and encourage behaviour that
supports both the long term financial soundness and the risk
management framework of ANZ, and to deliver superior long
term total shareholder returns;
differentiated rewards in line with ANZ’s culture of rewarding for
outperformance and demonstration of values led behaviours; and
provide a competitive reward proposition to attract, motivate
and retain the highest quality individuals in order to deliver ANZ’s
business and growth strategies.
The key aspects of ANZ’s remuneration strategy for the CEO and
Disclosed Executives are set out below:
REMUNERATION OBJECTIVES
Shareholder
value creation
Emphasis on ‘at risk’
components
Reward differentiation to
drive outperformance and
values led behaviours
Attract, motivate
and retain talent
Total target remuneration set by
reference to geographic market
Fixed
At Risk
Fixed remuneration
Short Term Incentive (STI)
Long Term Incentive (LTI)
Fixed remuneration is set based on
financial services market relativities reflecting
responsibilities, performance, qualifications,
experience and location.
STI targets are linked to the performance
targets of the Group, Division and individual
using a balanced scorecard approach,
which considers short term performance
and contribution towards longer term
objectives, and also the demonstration
of values led behaviours.
LTI targets are linked to relative
Total Shareholder Return (TSR)
over the longer term.
Delivered as:
Cash
Part cash and part equity,
with the equity deferred
for 1 and 2 years.
Deferred equity remains
at risk until vesting.
Equity deferred for 3 years.
Deferred equity remains
at risk until vesting.
This is tested once
at vesting date.
6. The Composition of Remuneration at ANZ
The Board aims to find a balance between:
fixed and at-risk remuneration;
short term and long term incentives; and
amounts paid in cash and deferred equity.
Refer Figure 1 for an overview of the target remuneration mix for the
CEO and Disclosed Executives.
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