2012 Annual Report - Hong Kong Monetary Authority

ANZ ANNUAL REPORT 2012
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 five highest paid executives in the Company and
the Group (being the five highest paid, relevant Group and Company executives who
participate in making decisions that affect the whole, or a substantial part, of the business
of the Company or who have the capacity to significantly affect the Company’s financial
standing). 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 share rights 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 or
exercising, multiplied by the number of shares and/or share rights 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 For KMP who ceased employment during 2012, the number of equity instruments “Vested
and exercisable” are as at their date of cessation.
4 D Hisco – Hurdled options granted 5 November 2004 were exercised on 4 November 2011.
One day VWAP on date of exercise was $20.9933. The exercise price was $20.68. STI deferred
share rights granted 12 November 2010 were exercised on 14 November 2011. One day
VWAP on date of exercise was $20.8876.
5 G Hodges – Hurdled options granted 5 November 2004 were exercised on 4 November
2011. One day VWAP on date of exercise was $20.9933. The exercise price was $20.68. LTI
performance rights granted 31 October 2008 were exercised on 9 November 2011. One day
VWAP on date of exercise was $21.8346.
6 J Phillips – was appointed to the CEO Global Wealth & Private Banking role on 1 March 2012
and no equity transactions were applicable for the period.
7 A Thursby – LTI performance rights granted 31 October 2008 were exercised on 4 November
2011. One day VWAP on date of exercise was $20.9933.
8 N Williams – was appointed to the Chief Risk Officer role on 17 December 2011 and no
equity transactions were applicable for the period.
9 P Marriott – ceased employment 31 August 2012 so equity transactions are to that date.
Transactions include those that transpired prior to cessation and those that were forfeited
on cessation. Hurdled options granted 5 November 2004 were exercised on 4 November
2011. One day VWAP on date of exercise was $20.9933. The exercise price was $20.68. STI
deferred options granted 31 October 2008 were exercised on 11 May 2012. One day VWAP
on date of exercise was $22.0692. The exercise price was $17.18. LTI performance rights
granted 31 October 2008 were exercised on 10 November 2011. One day VWAP on date of
exercise was $20.6017.
10 C Page – retired 16 December 2011 so equity transactions are to that date. Transactions
include those that transpired prior to cessation and those that were forfeited on cessation.
Treatment of equity on retirement is in line with treatment of equity on redundancy. LTI
performance rights granted 31 October 2008 were exercised on 14 November 2011. One day
VWAP on date of exercise was $20.8876. Due to cessation, 11,452 LTI deferred shares granted
12 November 2010 were forfeited and processed by Computershare on 20 December 2011.
11 The Disclosed Executives had a proportion of their STI amount deferred as equity. In 2012 D
Hisco received share rights rather than shares due to taxation regulations in New Zealand.
A share right effectively provides a right in the future to acquire a share in ANZ at nil cost
to the employee. Refer to the STI arrangements section for further details of the mandatory
deferral arrangements for the Disclosed Executives and Tables 8 and 9 for details of the
valuation methodology, inputs and fair value.
12 The 2011 LTI grants for Disclosed Executives were delivered as performance rights excluding
for the CRO. Refer to section 6.2.2 LTI Arrangements for further details and Table 8 for details
of the valuation, inputs and fair value.
Disclosed Executives’ Contract Terms
The following sets out details of the contract terms relating to the Disclosed Executives. The contract terms for all Disclosed Executives are
similar, but do on occasion, vary to suit different needs.
Length of contract
Notice periods
Resignation
Termination on
notice by ANZ
Redundancy
Disclosed Executives are on a permanent contract, which is an ongoing employment contract until notice is given
by either party.
In order to terminate the employment arrangements, Disclosed Executives are required to provide the Company
with six months’ written notice. ANZ must provide Disclosed Executives with 12 months’ written notice.
On resignation, unless the Board determines otherwise, all unvested deferred shares, all unvested or vested but
unexercised performance rights, all options and all deferred share rights are forfeited.
ANZ may terminate the Disclosed Executive’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, unless the Board
determines otherwise:
all unvested deferred shares, performance rights, options and deferred share rights are forfeited at the time notice
is given to the Disclosed Executive; and
only performance rights, options and deferred share rights that are vested may be exercised.
If ANZ terminates employment for reasons of redundancy, a severance payment will be made that is equal to
12 months’ fixed remuneration.
All STI deferred shares and STI deferred share rights remain subject to clawback and are released at the original
vesting date. Options, performance rights, LTI deferred shares and LTI deferred share rights are either released in
full or on a pro-rata basis, at the discretion of the Board with regard to the circumstances.
Death or total and
permanent disablement
Termination for
serious misconduct
Statutory Entitlements
Other arrangements
On death or total and permanent disablement all unvested STI deferred shares, all deferred share rights, performance
rights and all options will vest.
ANZ may immediately terminate the Disclosed Executive’s employment at any time in the case of serious misconduct,
and the employee will only be entitled to payment of fixed remuneration up to the date of termination.
On termination without notice by ANZ in the event of serious misconduct any options, performance rights, deferred
shares and deferred share rights still held in trust will be forfeited.
Payment of statutory entitlements of long service leave and annual leave applies in all events of separation.
P Chronican
As Mr Chronican joined ANZ in November 2009 he was not included in the LTI grants made to other Management
Board members in early November 2009. Accordingly, a separate LTI grant was made in December 2009 providing
performance rights on the same terms and conditions as those provided to Management Board for 2009, apart from
the allocation value which varied to reflect the different values at the respective grant dates.
A Thursby
As part of Mr Thursby’s employment arrangement, he was granted three separate tranches of deferred shares to the
value of $1 million per annum, subject to Board approval. The first tranche was granted in September 2007 and vested
in September 2010, the second tranche was granted in August 2008 and vested in August 2011, and the third tranche
was granted in September 2009 and vested in September 2012.
REMUNERATION REPORT 29