REMUNERATION REPORT – AUDITED
Letter to Shareholders
On behalf of the Board of Ramsay Health Care (Ramsay or the Group), I am pleased to present you with our FY21 Remuneration Report
(Report). Ramsay remains committed to ensuring our remuneration structures support Ramsay’s strategy and The Ramsay Way ('People Caring
for People'), as well as aligning our reward outcomes with the creation of sustainable, long-term value for shareholders and other stakeholders.
FY21 performance & highlights
FY21 has been marked by ongoing societal and commercial uncertainty, however the Group has adapted well and, once again, demonstrated
notable resilience in numerous volatile settings. Across all markets, our people, doctors and facilities have carried on supporting a significant
public sector and community response to the rapidly changing demands of the COVID environment. During FY21, the Group delivered solid
financial results, including strong cash flow, to support ongoing investment and drive business growth.
At Ramsay, we understand that our people are our greatest assets; indeed, The Ramsay Way underpins everything we do. During FY21, the
Board was especially pleased with the strong people and clinical outcomes delivered by the Group in particularly demanding circumstances.
Despite multiple public health lockdowns in Australia, UK, Europe and Asia, the Group did not require any redundancies or stand downs and we
continue to prioritise the health, safety and wellbeing of all our employees.
Ramsay’s 2030 strategy has been progressed in the interests of long-term shareholder value. This has included building additional capabilities
to ensure the Group is well placed to deliver various global and regional priorities. Our strong pipeline of organic growth opportunities has
continued to evolve and the Group remains keenly focused on cultivating operational excellence through strategic sourcing and optimising
Linking remuneration outcomes with Group performance
In FY21, having regard to the Group’s performance during the financial year (as outlined above) and the current external climate:
• no increases were made to fixed annual remuneration (FAR) for Executive Key Management Personnel (KMP);
• the FY21 STI outcomes are between target and maximum for Executive KMP, reflecting solid financial outcomes through the pandemic
disruption with results improving as the business adapts to the unpredictable operating environment (refer to section 3.2 for further detail);
• the FY19 LTI (tested at 30 June 2021) did not vest, reflecting that there was no vesting against the relative TSR or EPS components. No
portion of the EPS component vested given the impact of COVID in FY20. The relative TSR component of the FY18 LTI was also retested in
FY21 and did not vest (refer to section 3.3 for further detail).
Remuneration changes for FY21
Changes to LTI
In response to feedback from our shareholders and as foreshadowed in the FY20 Remuneration Report, the Group has made a number of
changes to the LTI plan for FY21 to more closely align with long term value creation and market practice.
Key changes included:
• the introduction of a return on capital (ROIC) gateway in respect of the component of the LTI assessed against CAGR EPS. Ramsay
continues to pursue a growth strategy – including significant acquisitions, as well as organic capital investment – in a capital-intensive
business. As such, the Group recognises that it is important to ensure that management deploys capital effectively. To reflect this, from FY21,
the EPS component of the LTI grant will only vest if a threshold level of ROIC is achieved;
36 Annual Report 2021