2008 Long Term Incentive Plan vesting and CEO Awards outcome
Release Time IMMEDIATE
Date 23 August 2013
2008 LONG TERM INCENTIVE PLAN VESTING AND CEO AWARDS OUTCOME
2008 Long Term Incentive Plan Vesting
BHP Billiton today announced the vesting outcomes for the five year Long Term Incentive
Plan (LTIP) awards granted in 2008. The LTIP applies to members of the Group
Management Committee (GMC).
For awards to vest in full, BHP Billiton must deliver a US dollar total shareholder return
(TSR) that exceeds the TSR of a group of peer companies by an average of 5.5 per cent per
year for five years, or 30.7 per cent in total compounded over the five year performance
period. The performance period ended on 30 June 2013.
The weighted average TSR for peer companies was negative 44.0 per cent which compared
to BHP Billiton’s TSR of negative 9.4 per cent. As a result, BHP Billiton outperformed its peer
companies by 34.6 per cent, and therefore met the requisite performance hurdle for full
The rules of the LTIP give the Remuneration Committee of the Board discretion to reduce
the number of awards that will vest, notwithstanding the fact that the performance hurdle for
full vesting has been met.
This year the Committee, with the support of the Board, exercised that discretion and
reduced vesting by 35 per cent for all current and former participating GMC members.
Accordingly, 35 per cent of awards will not vest and will instead lapse.
In doing so, the Committee took into account a range of factors, including the negative TSR
over the five year performance period which shareholders have experienced. While the
Committee recognised that the TSR performance was delivered in a difficult business
environment, it also felt that more closely aligning the experience of shareholders and
executives was important. As always, the Committee also looked at the total remuneration
The approach adopted by the Committee is consistent with the downwards re-basing of
executive remuneration that was undertaken when Andrew Mackenzie was appointed Chief
Executive Officer earlier this year, the outcome of which was reported at that time.
CEO Awards Outcome
When Andrew joined BHP Billiton in 2008, he was granted 450,964 awards based on the
2008 LTIP terms.
• 225,000 of the LTIP awards were granted in the ordinary course in connection with
his role as Chief Executive Non Ferrous and reflected the grant sizes to the other
business Chief Executives (“Regular Awards”).
• A further 225,964 awards (comprising 100,839 LTIP awards and 125,125 phantom
LTIP awards) were granted in order to compensate him for equity awards forgone
when he left his former employer (“Sign-on Awards”). The value and quantum of the
Sign-on Awards was determined on the recommendation of the Committee’s
independent adviser, Kepler Associates and disclosed at the time.
As all of the 450,964 awards were granted on terms that mirrored the 2008 LTIP, they have
now been tested against the TSR performance hurdle and are all subject to the 35 per cent
In addition, Andrew has concluded, and the Committee agrees, that despite the
outperformance of BHP Billiton compared to its peer group, the value delivered through
vesting of the Sign-on Awards would be excessive. Accordingly, Andrew has elected to
voluntarily relinquish a further 50,000 of the Sign-on Awards, on top of the 35 per cent
This means 243,126 of the 450,964 awards originally granted to Andrew have vested. The
243,126 vested awards are delivered to Andrew via 211,795 ordinary shares and a cash
payment representing 31,331 phantom LTIP awards.
All of the outcomes described above reflect a remuneration structure that the Committee and
the Board believe has contributed to the substantial financial outperformance of BHP Billiton
over many years, but also reflect a more modest approach to remuneration befitting the
The attached table contains the vesting outcomes for each current and former GMC member
who participated in the 2008 LTIP.
Deferred shares granted to GMC members in 2011 under the Group Incentive Scheme
based on performance during the year ended 30 June 2011 have also vested. Full details of
the remuneration outcomes, together with an overview of the Company’s remuneration
policy and approach, will be set out in the Remuneration Report that will be published in
September as part of the Company’s 2013 Annual Report.
Further information on BHP Billiton can be found at: www.bhpbilliton.com.
Sponsor: Absa Capital (the investment banking division of Absa Bank Limited, affiliated with
Media Relations Investor Relations
Emily Perry James Agar
Tel: +61 3 9609 2800 Mobile: +61 477 325 803 Tel: +61 3 9609 2222 Mobile: +61 467 807 064
email: Emily.Perry@bhpbilliton.com email: James.Agar@bhpbilliton.com
Fiona Hadley Andrew Gunn
Tel: +61 3 9609 2211 Mobile: +61 427 777 908 Tel: +61 3 9609 3575 Mobile: +61 402 087 354
email: Fiona.Hadley@bhpbilliton.com email: Andrew.Gunn@bhpbilliton.com
Eleanor Nichols United Kingdom and South Africa
Tel: +61 3 9609 2360 Mobile: +61 407 064 748
email: Eleanor.Nichols@bhpbilliton.com Tara Dines
Tel : +44 20 7802 7113 Mobile : +44 7825 342 232
United Kingdom Email : Tara.Dines@bhpbilliton.com
Ruban Yogarajah Americas
Tel: +44 20 7802 4033 Mobile: +44 7827 082 022
email: Ruban.Yogarajah@bhpbilliton.com James Agar
Tel: +61 3 9609 2222 Mobile: +61 467 807 064
Jennifer White email: James.Agar@bhpbilliton.com
Tel: +44 20 7802 7462 Mobile: +44 7827 253 764
email: Jennifer.White@bhpbilliton.com Matt Chism
Tel: +1 71 359 96158 Mobile: +1 281 782 2238
Tel: +1 713 499 5548 Mobile: +1 281 222 6627
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: 180 Lonsdale Street Registered Office: Neathouse Place
Melbourne Victoria 3000 Australia London SW1V 1BH United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Billiton Group which is headquartered in Australia
The following table shows the vesting outcomes for current and former GMC members who
participated in the 2008 LTIP (Mr Yeager and Mr Vanselow having left the Company on 8
July 2013 and 28 February 2012, respectively):
2008 LTIP Awards Available Vesting Lapsed Relinquished Vested
Participant For Vesting Percentage Awards Awards Awards
225,000 (Regular) 65% 78,750 – 146,250
225,964 (Sign-on) 65% 79,088 50,000 96,876
M Kloppers 500,000 65% 175,000 – 325,000
A Calderon 221,250 65% 77,438 – 143,812
M Randolph 225,000 65% 78,750 – 146,250
K Wood 175,000 65% 61,250 – 113,750
M Yeager 225,000 65% 78,750 – 146,250
A Vanselow 165,000 65% 57,750 – 107,250
Date: 23/08/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’).
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