Executives receive unconditional ownership of performance options or shares based on meeting strict hurdles based on a comparison of Westpac's total shareholder return (TSR) with that of the median of the 30 largest companies lis
ted on the Australian Stock Exchange (ASX).
All rights to performance options and performance share rights are completely lost if the Westpac's TSR performance fails to be at or above the median performance of the ranking group. Assuming Westpac beats the median then the payout reflects where the company ranks in a TSR league table.
If Westpac's TSR is at the median position of the ranking group, then executives can choose to take unconditional ownership of 50 per cent of the grant.
If Westpac's TSR ranking is above the median, an additional 2 per cent can be vested for each 1 per cent improvement in Westpac's rating against the ranking group. If for example, Westpac's TSR slots in at the 60th percentile, 70 per cent (50+ (10x2) can be vested. If Westpac's TSR is at or above the 75th percentile, then 100 per cent of the original grant can be vested.
A more detailed account of this of the Westpac Performance Plan , including the rules of vesting, can be found on http://www.westpac.com.au
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