Page 155 - Annual Report 2020

Andrew Mackenzie
Individual Measure
measures Individual scorecard targets Performance against scorecard targets outcome
Performance • Deliver value through Transformation. • BHP Operating System implementation, value chain automation and Target. Strategic Report
• Risk management embedded. World Class Functions activities on-track.
• Material risks being recorded appropriately, and agreed risk appetites
being embedded in the business.
Tailings dams • Tailings Dam Taskforce work. • Progressed the work of the Tailings Dam Taskforce in accordance with Target.
• Long-term strategy development. agreed plans, schedules and targets.
• Progressed a long-term tailings management strategy to deliver step
change risk reduction within 10 years.
Portfolio • Maximise the value of the current • Identified projects and options in Petroleum, Escondida, Western Australia Target.
portfolio. Iron Ore, Queensland Coal and Olympic Dam progressed according
• Progress delivery of value and returns to plans.
from future options. • Future option projects continue to progress well, including identified
• Exploration success. options in Petroleum, Copper and Potash. Governance at BHP
• Achieved positive exploration outcomes, with extensions to the lives
and reserves of conventional oil and gas fields.
Culture and • Gender representation advanced. • Notwithstanding positive improvements in gender representation Target overall
capability • Maintain a robust succession slate. in the second half, there was a slow start to FY2020 in the first half. (i.e. a blend
By 31 December 2019 gender diversity had increased to 24.8%, of above and
up from 24.5% at 30 June 2019. below target).
• A robust slate of potential successors to the CEO role and other ELT roles
has been achieved through a deliberate focus on a strong long-term talent
pool of candidates, evidenced by internal appointments to several key 3
roles during the year.
Social value • Manage risks to protect operating licence. • Continued to manage risks by meeting commitments to our workforce, Target overall
• Samarco strategy implemented. partners, communities and governments through health and safety, the (i.e. a blend of
• Create opportunities to enhance public commitment to and implementation of the climate change strategy above, on and
social value. including an action plan around our public commitments, and managing below target).
water permits, Native Title agreements and social investments.
• Progress made in implementing the agreed Samarco strategy, however Remuneration Report
there were some delays and further work and focus required.
• Continued to work closely with our communities and collaborate with
various local, regional and global stakeholders, new employment models
are building better outcomes for employees, and have a leading position
on social value through placing a high value on the long-term needs of
society and the environment.
Overall, it was considered that the performance of both Mike and Andrew against their individual measures KPI was as expected for their
respective periods as CEO. Accordingly, they were each awarded an outcome of 25 per cent, which is equal to target. Directors’ Report

3.3.3 LTIP performance outcomes The graph below shows BHP’s performance relative
to comparator groups.
LTIP vesting based on performance to June 2020
The five-year performance period for the 2015 LTIP ended on
30 June 2020. Mike Henry’s 2015 LTIP award comprised 192,360 BHP vs. Peer Group and Index TSR over the 2015 LTIP cycle
awards (granted as President Coal prior to his appointment as CEO) TSR since 1 July 2015 (%)
and Andrew Mackenzie’s 2015 LTIP award comprised 322,765
awards (reduced from 339,753 awards originally granted, prorated 60 BHP
for time served at the time of departure). Vesting is subject Peer Group
to achievement of the relative TSR performance conditions 40 Index Financial Statements
(MSCI)
and any discretion applied by the Remuneration Committee
(see section 3.3.5).
20
Testing the performance condition
For the award to vest in full, TSR must exceed the Peer Group TSR 0
(for 67 per cent of the award) and the Index TSR (for 33 per cent
of the award) by an average of 5.5 per cent per year for five years,
being 30.7 per cent in total compounded over the performance -20
period from 1 July 2015 to 30 June 2020. TSR includes returns
to BHP shareholders in the form of share price movements along
with dividends paid and reinvested in BHP (including cash and -40 Additional information
in-specie dividends).
BHP’s TSR performance was positive 29.0 per cent over the five-year -60 2015 2016 2017 2018 2019 2020
period from 1 July 2015 to 30 June 2020. This is above the weighted
median Peer Group TSR of positive 9.6 per cent and below the Index Years ended 30 June
TSR of positive 38.5 per cent over the same period. This level of
performance results in 48 per cent vesting for the 2015 LTIP award,
and accordingly 48 per cent of Mike Henry’s awards and Andrew
Mackenzie’s retained awards have vested, and 52 per cent have
lapsed. No compensation or DEP was paid in relation to the lapsed
awards. The value of Mike’s vested 2015 LTIP award has been Shareholder information
reported in section 3.3.1 and the value of Andrew’s vested 2015
LTIP award has been reported in section 3.3.24.

BHP Annual Report 2020 153