2012 Annual Report - Hong Kong Monetary Authority

REMUNERATION REPORT (continued)
CEO Equity
Details of deferred shares, options and performance rights granted to
the CEO during the 2012 year and in prior years which vested,
were exercised/sold or which lapsed/were forfeited during the 2012
year are set out in Table 4 below.
TABLE 4: CEO EQUITY GRANTED, VESTED, EXERCISED/SOLD AND LAPSED/FORFEITED
Name
CEO
Type of equity
Number
granted 1
Grant First date
date exercisable
Date
of expiry Number %
Vested Lapsed/Forfeited Exercised/Sold
Value 2
$ Number % Value2
$ Number %
Value 2
$
Vested and
exercisable
as at 30 Sep
2012
Unexer
-cisable
as at
30 Sep
2012
M Smith STI deferred shares 46,052 13-Nov-09 13-Nov-11 – 46,052 100 953,640 – – – (46,052) 100 961,916 – –
STI deferred shares 47,448 12-Nov-10 12-Nov-11 – 47,448 100 982,548 – – – (47,448) 100 991,075 – –
STI deferred shares 3 36,730 14-Nov-11 14-Nov-12 – – – – – – – – – – – 36,730
STI deferred shares 3 36,729 14-Nov-11 14-Nov-13 – – – – – – – – – – – 36,729
Special options 4 700,000 18-Dec-08 18-Dec-11 17-Dec-13 700,000 100 4,732,490 – – – (260,000) 37 2,022,904
(440,000) 63 4,624,356 – –
LTI performance rights 259,740 19-Dec-07 19-Dec-11 18-Dec-12 259,740 100 5,370,176 – – – (259,740) 100 5,359,579 – –
LTI performance rights 5 326,424 16-Dec-11 17-Dec-14 16-Dec-16 – – – – – – – – – – 326,424
1 The maximum value at the time of the grant is determined by multiplying the number
granted by the fair value of the equity instruments. The minimum value of the grants, if
the applicable conditions are not met at vesting date, is nil. Options/rights granted include
those granted as remuneration to the CEO. No options/rights have been granted since the
end of 2012 up to the signing of the Director’s Report on 5 November 2012.
2 The value of shares and/or performance rights is based on the one day VWAP of the
Company’s shares traded on the ASX on the date of vesting, lapsing/forfeiture or exercising,
multiplied by the number of shares and/or performance rights. The value of options is based
on the difference between the one day VWAP and the exercise price, multiplied by the
number of options.
3 The CEO had a proportion of his STI amount deferred as equity. The Board determined the
deferred amount for the CEO. Refer to Table 9 for details of the valuation methodology,
inputs and fair value.
4 Of the 700,000 special options granted 18 December 2008, 260,000 were exercised on
21 February 2012. One day VWAP on date of exercise was $21.9604. The remaining 440,000
special options were exercised on 20 August 2012. One day VWAP on date of exercise was
$24.6899. The exercise price was $14.18. LTI performance rights granted 19 December 2007
were exercised on 22 December 2011. One day VWAP on date of exercise was $20.6344.
5 The 2011 LTI grant for the CEO was delivered as performance rights. Refer to section CEO LTI
for further details of the LTI grant and Table 8 for details of the valuation, inputs and fair value.
The movement during the reporting period in shareholdings, options and performance rights of the CEO (held directly, indirectly and by related
parties) is provided in Notes to the Financial Statements – note 46 on page 184.
CEO’s Contract Terms
The following sets out details of the contract terms relating to the CEO. The contract terms are in line with industry practice (based
on external advice on Australian and international peer company benchmarks) and ASX Corporate Governance Principles.
Length of contract
Notice periods
Resignation
Mr Smith commenced as CEO and Executive Director of ANZ on 1 October 2007 and is on a permanent contract,
which is an ongoing employment contract until notice is given by either party.
Mr Smith or ANZ may terminate the employment agreement by providing 12 months’ written notice.
On resignation, all unvested STI deferred shares, all unexercised performance rights (or cash equivalent) and all
unvested and all vested unexercised options will be forfeited.
Termination on
notice by ANZ
Death or total and
permanent disablement
ANZ may terminate Mr Smith’s employment by providing 12 months’ written notice or payment in lieu of the notice
period based on fixed remuneration.
On termination on notice by ANZ all unvested STI deferred shares will be released at the original vesting date unless
the Board determines otherwise; all performance rights (or cash equivalent) which have vested or vest during the
notice period will be retained and become exercisable; all performance rights (or cash equivalent) which have not yet
vested will be retained and will vest and become exercisable subject to the relevant time and performance hurdles
being satisfied. All unvested options will be forfeited.
On death or total and permanent disablement, all unvested STI deferred shares, all performance rights (or cash
equivalent) and all options will vest.
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