Performance measures and targets: 2020 LTIP awards
Source: RNS
Diageo plc
LEI: 213800ZVIELEA55JMJ32
Performance measures and targets for 2020 Long-Term Incentive Plan awards
As disclosed in the Annual Report for the year ended 30 June 2020, and RNS 0779Y issued on 4 September 2020, awards of performance shares and share options were granted to participants on 3 September 2020, in accordance with the Rules of the Diageo 2014 Long Term Incentive Plan (DLTIP). These awards will vest on 3 September 2023, subject to the achievement of the performance conditions, as measured over the three-year period to 30 June 2023.
Due to the uncertainty created by the Covid-19 pandemic, and as noted in the Annual Report for the year ended 30 June 2020, the Remuneration Committee of the Board of Diageo plc decided to set targets for these awards after the reporting of interim results for 1 July 2020 to 31 December 2020. Accordingly, the threshold, midpoint and maximum targets for each of the performance measures disclosed in the Annual Report1 are detailed below.
This disclosure should be considered in the context of remuneration only and should not be construed as performance guidance.
2020 DLTIP Awards
|
Performance over the period |
Weighting |
Threshold |
Midpoint |
Maximum |
|
Performance shares |
|
|
|
|
|
Organic Net Sales Value growth (CAGR)
|
40% |
4% |
6% |
8% |
|
Organic Profit Before Exceptional items and Tax growth (CAGR)1 |
40% |
4.5% |
8.25% |
12% |
|
Environmental, Social and Governance (ESG)2, comprising five measures as below: |
20% |
- |
- |
- |
|
Reduction in greenhouse gas emissions |
5% |
6.3% |
10.3% |
14.3% |
|
Improvement in water efficiency |
5% |
5.8% |
8.5% |
11.2% |
|
Number of people with changed attitudes on the dangers of underage drinking following participation in Diageo supported education programmes |
5% |
0.75m |
1m |
1.25m |
|
% female leaders globally |
2.5% |
41% |
42% |
43% |
|
% ethnically diverse leaders globally |
2.5% |
38% |
39% |
40% |
|
Share Options |
|
|
|
|
|
Cumulative Free Cash Flow |
50% |
£6,200m |
£7,200m |
£8,200m |
|
Relative Total Shareholder Return |
50% |
9th and above |
- |
3rd and above |
1 Due to ongoing corporate tax uncertainties, the Remuneration Committee has decided to retain the PBET measure, as detailed above, which has been in place under the long-term incentive plan since 2017. The Annual Report for the year ended 30 June 2020 disclosed a change from this measure to Earnings Per Share (EPS).
2The ESG measures and targets are consistent with the pillars of our 'Society 2030: Spirit of Progress' plan published in November 2020.
Consistent with the approach taken in previous years, 20% of the award will vest for achieving threshold performance and 100% of the award will vest for achieving the maximum level of performance. There will be straight-line vesting between threshold and maximum for each measure, with the exception of relative total shareholder return, where the vesting schedule between threshold and maximum is stepped for each ranking compared to peers, as disclosed in the Annual Report for the year ended 30 June 2020.
James Edmunds
Deputy Company Secretary
10 February 2021
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
