82 Woodside Petroleum Ltd|Annual Report 2018
CEO and executive KMP remuneration structure
Woodside's remuneration structure for the CEO and executive KMP is now comprised of two components; fixed remuneration
and variable reward.
Table 3 – Key VAR features
Allocation methodology Restricted Shares and Performance Rights will be allocated using a face value allocation
methodology. The number of Restricted Shares and Performance Rights is calculated by dividing
the deferred value by the volume weighted average price (VWAP) each year.
Dividends Executives are entitled to receive dividends on Restricted Shares. No dividends are paid on
Performance Rights prior to vesting. For Performance Rights that do vest, a dividend equivalent
payment will be paid by Woodside for the period between allocation and vesting.
Clawback provisions
The Board has the discretion to reduce unvested entitlements including where an executive has acted
fraudulently or dishonestly or is found to be in material breach of their obligations, there is a material
misstatement or omission in the financial statements or the Board determines that circumstances have
occurred that have resulted in an unfair benefit to the executive.
Control event
The Board has the discretion to determine the treatment of any EIS award on a change of
control event. If a change of control occurs during the 12-month performance period, an
executive will receive at least a pro-rata cash payment in respect of the unallocated cash and
Restricted Share components of the EIS award for that year, assessed at target. If a change of
control occurs during the vesting period for equity awards, Restricted Shares will vest in full
whilst Performance Rights may, at the discretion of the Board, vest on an at least pro-rata basis.
Cessation of employment During a Performance Period, should an executive provide notice of resignation or be terminated
for cause, no EIS award will be provided. In any other case, Woodside will have regard to
performance against target and the portion of the performance period elapsed in determining the
form of any EIS award.
During a Vesting Period, should an executive provide notice of resignation or be terminated for
cause, any EIS award will be forfeited or lapse. In any other case, any Restricted Shares will vest in
full from a date determined by the Board whilst any Performance Rights will remain on foot and
vest in the ordinary course subject to the satisfaction of applicable conditions. The Board will have
discretion to accelerate the vesting of unvested equity awards, subject to termination benefits laws.
No retesting There will be no retest applied to EIS awards. Performance Rights will lapse if the required RTSR
performance is not achieved at the conclusion of the five-year period.
+Based upon the scope of the executive’s role and their
individual level of knowledge, skill and experience.
+Benchmarked for competitiveness against domestic and
international peers to enable the company to attract and
retain superior executive capability.
The Board introduced a MSR policy for executive KMP to reflect the long-term focus of management and further strengthen
alignment with shareholders. The policy requires executive KMP to have acquired and maintained Woodside shares for a minimum
total purchase price of at least 100% of their fixed remuneration after a period of five years and in the case of the CEO a minimum of
200% of fixed remuneration.
+Executives are eligible to receive a single variable reward
linked to challenging individual and company annual
targets set by the Board.
+12.5% of the variable reward is paid in cash.
+27.5% is allocated in Restricted Shares, subject to a
three-year deferral period.
+30% is allocated in Restricted Shares, subject to a
five-year deferral period.
+30% is allocated in Performance Rights which are subject
to a RTSR test five years after the date of grant; divided
into two separate tranches with one-third tested against
a comparator group that comprises the ASX 50 and the
remaining two-thirds against a group of international oil
and gas companies determined by the Board.