Lendlease Annual Report 2021

Notes to Consolidated Financial Statements continued Vesting Schedule - CAGR % FUM (FY21 only) Below CAGR for threshold vesting No vesting Between CAGR for threshold vesting and CAGR for target vesting Pro rata vesting on a straight line basis between 20 per cent and 50 per cent vesting At CAGR for target vesting 50 per cent vesting Between CAGR for target vesting and CAGR for maximum vesting Pro rata vesting on a straight line basis between 50 per cent and 100 per cent vesting At CAGR for maximum vesting 100 per cent vesting d. Long Term Award (LTA) The LTA plan replaced the LTI for a limited number of executives from 2019. It was designed to motivate and reward key executives to deliver on the Group’s long term strategy and to allow them to share in the value created for securityholders. Specifically, the objectives are to: • Create rewards that are aligned to earnings • Align the interests of securityholders and our most senior executives • Promote team behaviours and an enterprise leadership mindset • Retain the senior executive team. The intended outcome is that reward and strategy are better aligned. Arrangements for LTA Awards LTA Design How the LTA Works Performance Rights • An annual grant of ‘performance rights’ is made to a limited number of executives on the Global Leadership Team • The Board intends that the awards be settled in Lendlease securities, although some or all of the award may be settled in cash at the Board’s discretion • Performance rights are rights to receive a variable number of Lendlease securities or at the discretion of the Board, cash with an equivalent value, upon vesting • Outcomes against performance hurdles will determine how many Lendlease securities will be received following vesting between nil and a maximum number • In the event of a change in control of the Group, the Board has the discretion to determine whether the vesting of some or all performance rights should be accelerated. Performance Period (applicable to FY19, FY20 and FY21 Grants) • 100 per cent of the performance rights are assessed over a three year period and the number of Lendlease securities that may be delivered on vesting is determined. The first tranche will vest immediately thereafter, and the second, third and fourth tranches will be deferred and will vest progressively four, five and six years after the grant date • If the performance hurdle is not met, the awards are forfeited • There is no retesting of the LTA grant. Termination of Employment • If the executive resigns and becomes engaged in activities that are competitive with the Group or is terminated for cause, the unvested LTA is forfeited • If the executive is terminated and if the Board considers vesting would provide a benefit that was unwarranted or inappropriate, the Board has the discretion to lapse some or all performance rights prior to the vesting date • For ‘good leavers’, the LTA grant may remain on foot, subject to the original terms. Performance Hurdles Financial Years 2019 and 2020 • 50 per cent subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100 Index. The S&P/ASX 100 companies are determined at the start of the performance period • 50 per cent subject to Return on Equity (ROE) hurdle. Financial Year 2021 • One third subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100 Index. The S&P/ASX 100 companies are determined at the start of the performance period • One third subject to Average Operating Return on Equity (Operating ROE) hurdle • One third subject to compound annual growth rate (CAGR) % in funds under management. Performance Period (applicable to FY19, FY20 and FY21 Grants) • 100 per cent of the performance securities are assessed over a three year period. If the performance hurdle is not fully achieved at this time, those performance securities that have not vested will lapse • If the performance hurdle is not met, the awards are forfeited • There is no retesting on any portion of the LTI grant. Termination of Employment • If the executive resigns or is terminated for cause, the unvested LTI is forfeited • If the executive is terminated and if the Board considers vesting would provide a benefit that was unwarranted or inappropriate, the Board can adjust unvested LTI prior to the vesting date • For ‘good leavers’, the LTI grant may remain on foot, subject to the original terms • In exceptional circumstances (such as death or total and permanent disability), the Board may exercise discretion and settle the award at the time of termination of employment. Performance Hurdles Financial Years 2017 to 2020 • 50 per cent subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100 Index. The S&P/ASX 100 companies are determined at the start of the performance period • 50 per cent subject to Average Return on Equity (ROE) hurdle. Financial Year 2021 • One third subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100 index. The S&P/ASX 100 companies are determined at the start of the performance period • One third subject to Average Operating Return on Equity (Operating ROE) hurdle • One third subject to compound annual growth rate (CAGR) % in funds under management. Vesting Schedule - Relative TSR (FY17 to FY21) Measure Percentage of performance securities that vest as a proportion of maximum opportunity Below the 50th percentile No vesting At the 50th percentile 50 per cent vesting At or above the 51st percentile but below the 75th percentile Pro rata vesting on a straight line basis between 52 per cent and 98 per cent At or above the 75th percentile 100 per cent vesting Vesting Schedule - Average ROE (FY17 only)  Less than 11 per cent No vesting At 11 per cent 25 per cent vesting Greater than 11 per cent but below 15 per cent Pro rata vesting on a straight line basis between 25 per cent and 100 per cent vesting At or above 15 per cent 100 per cent vesting Vesting Schedule - Average ROE (FY18 to FY20) 10 per cent or less No vesting Above 10 per cent but below 14 per cent Pro rata vesting on a straight line basis between 0 per cent and 100 per cent vesting At or above 14 per cent 100 per cent vesting Vesting Schedule - Average Operating ROE (FY21 only) Less than 8 per cent No vesting Between 8 per cent and target Operating ROE set by the Board Pro rata vesting on a straight line basis between 20 per cent and 50 per cent vesting At target Operating ROE set by the Board 50 per cent vesting Between target Operating ROE set by the Board and 11 per cent Pro rata vesting on a straight line basis between 50 per cent and 100 per cent vesting At or above 11 per cent 100 per cent vesting Section F: Other Notes continued 35. Employee Benefits continued 187 186 Lendlease Annual Report 2021 Financial Statements