8. REMUNERATION REPORT – AUDITED
RAMSAY HEALTH CARE LIMITED
The Ramsay Way ('People Caring for People') is the Group’s cultural backbone which assists in guiding decision making
that is both people and outcome focused, while also balancing risk behaviours in both a financial and non-financial sense.
The Ramsay Way performance modifier is a modifier which allows for adjustments to outcomes for each individual, based
on their demonstration of The Ramsay Way values and behaviours. The application of this modifier can only reduce the
quantum of awards, with the modifier being a multiplier between 0–100%.
Delivery After performance is assessed, the STI award is delivered 50% in cash and 50% in deferred equity in the form of
• For the CEO & MD, restricted shares are granted and deferred for 3 years.
• For other Executive KMP, the deferral period is 2 years with 50% of the deferred equity being released after the first year
and the second 50% released at the end of the subsequent year.
Restricted shares are allocated on a face value basis by dividing the deferred STI amount by the 5-day volume weighted
average price (VWAP) of Group shares to the STI payment date (rounded to the nearest whole number of shares).
Deferred STI Amount
(50% of STI Award) /
Face value allocation using
5 Day VWAP to STI
1 Includes MD & CEO and former CEO Ramsay Australia.
2 Includes Group CFO.
2.5 FY21 Long Term Incentives (LTI) – granted
Overview of changes
The LTI plan is designed to reward sustainable long-term performance and align executives to shareholder outcomes, while allowing Ramsay to
attract and retain the best talent globally.
As noted above, key changes were made to the FY21 LTI plan to align with best practice. These changes included:
• the introduction of a 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;
• transitioning to an EPS vesting schedule assessed against long-term targets. From FY21, the EPS metric used in the LTI will be based on
a 3-year range for EPS growth against threshold and stretch performance levels. This will increase transparency for shareholders, strengthen
the focus on long-term performance and is aligned with market practice;
• the Group will no longer report Core EPS and Non-Core EPS. To align with this, the EPS metric used under the FY21 LTI onwards will be
statutory EPS (as further outlined below).
The table below outlines the key terms attaching to the LTI awards granted to Executive KMP during FY21.
The table below outlines the face value of LTI awards granted to Executive KMP during FY21. LTI opportunities have
been set based on the ability of the executive to influence sustainable long-term value creation.
The CEO Ramsay Australia was granted an LTI in FY21 with a face value of $2,098,346 or 219% of FAR (which reflects a
legacy LTI arrangement which was progressively reduced each year). The Board of the Group determined that Mr Sims’
FY21 LTI grant would be pro-rated to 2 July 2021 relative to the performance period (being the date he formally ceased
employment with the Group), with the pro-rata amount left on foot to be tested and vest in the ordinary course at the
original vesting dates. The pro-rata opportunity is shown in the table below. As Mr Sims retired, his other legacy LTI
awards have been left on foot to be tested and vest in the ordinary course.
Opportunity (% of FAR)
C.R. McNally 175 3,650,325
M.J. Roberts 90 1,080,000
D.A. Sims (former) 73 699,449
Instrument The Group’s LTI awards are delivered in performance rights.
Performance rights are granted for no consideration as they form part of the remuneration package for Executive KMP.
Each performance right is an entitlement to receive a fully paid ordinary share in Ramsay Health Care Limited at no cost
(or an equivalent cash payment at the discretion of the Board).
42 Annual Report 2021