Macquarie Group, Ltd. · ASX:MQG
Macquarie — Shareholder Meeting (December 2009)
29 slides from Macquarie's shareholder meeting presentation, Dec 17, 2009
Slide 1: Chairman's Address - Macquarie Group Limited General Meeting
CHAIRMAN’S ADDRESS MACQUARIE GROUP LIMITED GENERAL MEETING 17 DECEMBER 2009 For personal use only THE WESTIN, SYDNEY CHECK AGAINST DELIVERY GOOD AFTERNOON LADIES AND GENTLEMEN AND WELCOME TO THIS GENERAL MEETING OF MACQUARIE GROUP LIMITED. I’M DAVID CLARKE, THE CHAIRMAN OF MACQUARIE GROUP AND I’LL B
Slide 2: Introduction of directors and senior executives
BEFORE WE GET UNDERWAY, I WOULD LIKE TO INTRODUCE OUR DIRECTORS AND SOME OF OUR SENIOR EXECUTIVES. For personal use only ON MY LEFT IS YOUR CHIEF EXECUTIVE OFFICER NICHOLAS MOORE. NEXT TO HIM IS THE GROUP’S CHIEF FINANCIAL OFFICER GREG WARD, THEN NON-EXECUTIVE DIRECTORS JOHN NILAND, PETER WARNE AND
Slide 3: What are shareholders being asked to approve?
WHAT ARE SHAREHOLDERS BEING ASKED TO APPROVE? THE PURPOSE OF TODAY’S MEETING IS TO DISCUSS AND SEEK SHAREHOLDER SUPPORT FOR PROPOSED CHANGES TO For personal use only MACQUARIE’S REMUNERATION ARRANGEMENTS. ON 31 MARCH THIS YEAR, WE ANNOUNCED PROPOSED CHANGES TO OUR REMUNERATION ARRANGEMENTS, WHICH WE
Slide 4: Why does Macquarie need approval for termination benefits?
THE FIRST RELATES TO BOTH THE IMPLEMENTATION AND OPERATION OF THE NEW EQUITY PLAN, CALLED THE MACQUARIE For personal use only GROUP EMPLOYEE RETAINED EQUITY PLAN, AND THE RELEASE OF DEFERRED REMUNERATION TO TERMINATING STAFF. THE SECOND APPROVAL IS FOR THE PARTICIPATION BY THE MANAGING DIRECTOR AND
Slide 5: Termination benefits and deferred remuneration release
THIS PARTICULAR RESOLUTION RELATES INSTEAD TO THE RELEASE OF REMUNERATION THAT HAS BEEN EARNED IN PRIOR YEARS AND RETAINED BY MACQUARIE. For personal use only IN MOST CASES, EXECUTIVE DIRECTORS FORFEIT ANY UNVESTED INCENTIVES WHEN THEY LEAVE MACQUARIE. HOWEVER, THERE ARE LIMITED AND APPROPRIATE EXCE
Slide 6: Proposed remuneration changes - retention levels
I WILL NOW TALK ABOUT THE PROPOSED REMUNERATION CHANGES. For personal use only PROPOSED REMUNERATION CHANGES - RETENTION LEVELS TURNING FIRST TO PROFIT SHARE RETENTION. UNDER THE PROPOSED CHANGES, A GREATER PROPORTION OF PROFIT SHARE WILL BE DEFERRED AND DELIVERED AS EQUITY RATHER THAN AS A CASH BON
Slide 7: Investment of retained profit share
THESE ARE MEMBERS OF THE OPERATIONS REVIEW COMMITTEE AND OTHERS WHO HAVE A SIGNIFICANT MANAGEMENT OR RISK For personal use only RESPONSIBILITY IN THE ORGANISATION. FOR OTHER EXECUTIVE DIRECTORS, FROM 2010, 40 PER CENT OF EACH ANNUAL PROFIT SHARE ALLOCATION WILL BE RETAINED. INVESTMENT OF RETAINED PR
Slide 8: Vesting and release
SHARES AND MACQUARIE-MANAGED FUNDS, DEPENDING ON EACH EXECUTIVE DIRECTOR’S ROLE. For personal use only FOR OTHER STAFF, RETAINED PROFIT SHARE PREVIOUSLY HELD IN CASH WILL BE INVESTED IN MACQUARIE SHARES, WITH NO CHANGE TO THE VESTING ARRANGEMENTS OR RETENTION LEVELS. VESTING AND RELEASE THE VESTING
Slide 9: Early vesting and release
EARLY VESTING AND RELEASE OUR PROPOSED REMUNERATION CHANGES ALSO PLACE MORE ONEROUS CONDITIONS ON TERMINATION, WHILE ADDING A NEW For personal use only DISQUALIFYING EVENT. CURRENTLY, A DEPARTING EXECUTIVE DIRECTOR’S RETAINED PROFIT SHARE IS PAID OUT AFTER SIX MONTHS. UNDER THE PROPOSED ARRANGEMENTS
Slide 10: Performance share units
THIS WILL INCLUDE BUT IS NOT LIMITED TO SITUATIONS, WHERE THE ACTION OR INACTION LEADS TO A MATERIAL FINANCIAL RESTATEMENT, A SIGNIFICANT FINANCIAL LOSS OR ANY SIGNIFICANT For personal use only REPUTATIONAL HARM TO MACQUARIE OR ITS BUSINESSES. PERFORMANCE SHARE UNITS IN PLACE OF OPTIONS GRANTS, EXEC
Slide 11: Transitional arrangements
THE INTRODUCTION OF EPS IS PARTICULARLY APPROPRIATE FOR THE EXECUTIVE COMMITTEE WHO ARE AT A LEVEL WITHIN MACQUARIE WHERE THEY CAN HAVE AN IMPACT ON ITS For personal use only ACHIEVEMENT. AT THE SAME TIME, FACTORS OVER WHICH EXECUTIVES HAVE LITTLE CONTROL ARE EXCLUDED. THE UNITS WILL VEST ON A SLIDI
Slide 12: Specific resolutions - MEREP initial size
THESE AMOUNTS WILL VEST OVER SEVEN YEARS FOR EXECUTIVE COMMITTEE MEMBERS AND FIVE YEARS FOR OTHER EXECUTIVE DIRECTORS, SUBJECT TO ANY DISQUALIFYING EVENTS. For personal use only ANY RETAINED PROFIT SHARE NOT TRANSITIONED TO THE NEW ARRANGEMENTS WILL BE GRANDFATHERED IN THE PRE-2009 DIRECTORS’ PROFIT
Slide 13: MEREP conversion price and Managing Director resolution
SPECIFIC RESOLUTIONS – MEREP CONVERSION PRICE For personal use only IN ACCORDANCE WITH OUR STATEMENT ON 1 MAY THIS YEAR, 2009 RETAINED PROFIT SHARE AND PRE-2009 PROFIT SHARE TRANSITIONED FROM THE OLD DIRECTORS’ PROFIT SHARE PLAN WILL BE CONVERTED TO SHARES AT THE VOLUME WEIGHTED AVERAGE PRICE FROM 4
Slide 14: Managing Director's restricted and performance share units
IT IS PROPOSED THAT RESTRICTED SHARE UNITS BE ISSUED TO THE MANAGING DIRECTOR IN THE FOLLOWING AMOUNTS: For personal use only • UP TO A MAXIMUM OF 415,667 RESTRICTED SHARE UNITS REPRESENTING $A15.1 MILLION OR 80 PER CENT OF PRE-2009 RETAINED PROFIT SHARE. • 57,270 RESTRICTED SHARE UNITS REPRESENTING
Slide 15: Conclusion and key elements of the proposal
DAY ON WHICH THE NOTICE OF MEETING WAS CONSIDERED BY THE BOARD. For personal use only IN CONCLUSION, I WOULD LIKE TO SAY THAT THE APPROVALS BEING SOUGHT ARE REQUIRED BY THE CORPORATIONS ACT AND THE ASX LISTING RULES, BUT, TO SUMMARISE, THE KEY ELEMENTS OF THE PROPOSAL ARE AS FOLLOWS: • THE PROPORTIO
Slide 16: Macquarie Group Limited General Meeting December 2009
For personal use only Macquarie Group Limited General Meeting 17 December 2009
Slide 17: What are shareholders being asked to approve?
What are shareholders being asked to approve? For personal use only Item 1 – Approval of Proposed Remuneration Arrangements — Implementation and ongoing operation of the new employee equity plan (“MEREP”); and — Potential “termination benefits” – approval sought where deferred remuneration is rele
Slide 18: Why does Macquarie need shareholder approval for termination benefits?
Why does Macquarie need shareholder approval for some “termination benefits”? For personal use only In most cases, Macquarie’s deferred remuneration arrangements will result in: — An executive’s deferred remuneration being released on vesting over the course of their employment with Macquarie; and
Slide 19: Proposed Remuneration Changes: Retention
Proposed Remuneration Changes: Retention For personal use only Total Retention levels 2007 2008 2009 2009 2010 Current1 Proposed Proposed CEO and Managing 20% 30% 55% 55% 55% Director Other Executive 20% 30% 40% 50% 50% Committee Members Designated Executive 20% 20% 20% 50% 50% Directors Other Execu
Slide 20: Proposed Remuneration Changes: Investment of Retained Profit Share
Proposed Remuneration Changes: Investment of Retained Profit Share For personal use only Proposed percentage allocation of retained profit share that is invested in Macquarie shares (New Equity Plan) and Macquarie-managed fund equity (Post- 2009 DPS Plan) depending on the staff member’s role: Role M
Slide 21: Proposed Remuneration Changes: Vesting and Release
Proposed Remuneration Changes: Vesting and Release For personal use only The following vesting and release schedule for 2009 and 2010 retained profit share is proposed: Role 2009 Current2 2009 Proposed 2010 Proposed CEO DPS Plan –vests 20% in each of years 20% in each of years between 5 and 10 years
Slide 22: Proposed Remuneration Changes: Early vesting and release
Proposed Remuneration Changes: Early vesting and release For personal use only New Disqualifying event - retained profit share will be forfeited where an individual has acted in a way that damages Macquarie, including where the action leads to a material financial restatement, a significant financi
Slide 23: Performance Share Units (PSUs)
Performance Share Units (PSUs) For personal use only All Options grants suspended going forward and replaced by hurdled PSUs only for Executive Committee members PSUs will vest in three tranches after 2, 3 and 4 years PSUs become exercisable upon achieving certain performance hurdles 2 perfo
Slide 24: Transitional Arrangements
Transitional Arrangements For personal use only Executive Directors have the choice to leave their pre-2009 retained profit share in the Pre-2009 DPS Plan, or move some or all of these amounts into the new arrangements (“Transitioned Amounts”) Transitioned Amounts will be partially invested in t
Slide 25: New Equity Plan (MEREP) - Initial Size
New Equity Plan (MEREP) – Initial Size For personal use only New Equity Plan (MEREP) will be used to deliver remuneration in the form of Macquarie shares MEREP will initially comprise a portion of the 2009 retained profit share and Transitioned Amounts Following the election by Executive Direc
Slide 26: New Equity Plan (MEREP) - Conversion Price
New Equity Plan (MEREP) – Conversion Price For personal use only In accordance with our statement on 1 May 2009, 2009 retained profit share and pre-2009 profit share transitioned from the DPS Plan, will be converted to shares at the VWAP from 4 May 09 to 29 July 09, being $A36.36 — This compares t
Slide 27: Participation of the Managing Director in the MEREP
Participation of the Managing Director in the MEREP For personal use only Shareholder approval is being sought so that the Managing Director can participate in the MEREP under the proposed new remuneration arrangements. Not new remuneration - has been earned and retained over a period of up to 1
Slide 28: Summary
Summary For personal use only Key elements of proposed remuneration changes: Proportion of profit share that is retained will increase, and proportion that immediately vests will decrease; Proportion of profit share delivered as cash will decrease, and proportion delivered as equity will increas
Slide 29: Glossary
Glossary For personal use only CAGR Compound Annual Growth Rate CEO Chief Executive Officer CFO Chief Financial Officer CRO Chief Risk Officer DPS Directors Profit Share EPS Earnings Per Share MD Managing Director MERP Macquarie Group Employee Retained Equity Plan PSU Performance Share Units ROE Ret
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