Lendlease Annual Report 2024

158 Lendlease Annual Report 2024 Notes to Consolidated Financial Statements continued 35.e. Restricted Securities Award (RSA) The Restricted Securities Award (RSA), previously referred to as the LTA Minimum, is similar to fixed remuneration as it is not subject to performance conditions. It is designed to motivate and reward a limited number of key executives to deliver on the Group’s long term strategy and to allow them to have a sense of ownership and share in the value created for securityholders. The RSA (and previously referred to LTA Minimum) was discontinued from FY22 under the revised Executive Reward Strategy. Arrangements for RSA Awards RSA Design How the RSA Works Performance Rights • An annual grant of ‘performance rights’ is made to a limited number of executives on the Global Leadership Team • However, following feedback from proxy-holders and other stakeholders, the RSA has no longer been offered from FY22 • 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 one Lendlease stapled security, or at the Board’s discretion, cash or other instruments of equivalent value • 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. Vesting Period • The first tranche (i.e. 25%) will vest after three years and the second, third and fourth tranches will vest progressively four, five and six years after the grant date. 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 RSA 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 RSA grant may remain on foot, subject to the original terms. 35.f. Google Development Ventures (GDV) Incentive Incentive Design How the Incentive Works Performance Rights • A one-off grant of ‘performance rights’ to Denis Hickey to reward the successful delivery of GDV Performance Period • 3 years from 1 July 2021 to 30 June 2024 Performance Hurdles • 70% of performance rights will vest based on the achievement of the key milestones for GDV during the performance period, including the securing of entitlements and capital plans and the commencement of construction for each project • 30% of performance rights will vest based on customer satisfaction feedback from the client and internal stakeholders at key touchpoints in the project life cycle, so that GDV milestones are not only delivered within the required timeframes but also to an exceptional standard Termination of Employment • In the event of resignation or termination for cause, unvested rights are forfeited • In all other circumstances, the portion of the award that reflects milestones that are already tested and achieved during the performance period will remain on foot. The untested portion is forfeited (except in the case of redundancy, whereby the untested portion will be continue to be tested against plan milestones and vest if applicable following the end of the performance period) 35.g. Amounts Recognised in the Financial Statements LTI and LTA awards are valued using Monte-Carlo simulation methodology for the TSR component and the Black-Scholes-Merton model for the non-market based performance measures. Retention awards are valued by discounting the security price by the expected dividends assumed to be paid from the valuation date until the vesting date (if applicable). The model inputs include the Lendlease Group security price, a risk free interest rate, expected volatility and dividend yield. During the financial year ended 30 June 2024, 3,080,628 awards were granted with a weighted average fair value of $6.65, and a $22 million expense was recognised in the Income Statement in relation to equity settled security based payment awards (June 2023: $49 million). Section F. Other Notes continued 35. Employee Benefits continued