REA Group Ltd Annual Report 2021

Annual Report 2021 | REA Group Ltd 5. Executive remuneration components (continued) Why were these performance conditions chosen? Strategic targets were chosen as a performance condition as they represent the key drivers of future growth in the areas of new product and product enhancement, data and digital advancement and audience capture and engagement. Relative TSR was chosen as a performance condition to provide a direct link between the experience of our shareholders and executive long-term rewards. The performance period commenced in February 2020, to moderate the impact of COVID-19 from the Company and peer group, given the significantly different levels and speeds of recovery across the peer group as at 1 July 2020 (when the performance period would normally commence). Given the resilience of the Company’s share price through this period of uncertainty, the Board believes that ‘top half’ performance justifies the vesting of all performance rights subject to the relative TSR measure. EBITDA growth was chosen as a performance condition as the Company continues to focus upon short-term control of costs through COVID-19 without impacting long-term business success. Are there any restrictions placed on the rights? Group policy prohibits executives from entering into transactions or arrangements which operate to transfer or limit the economic risk of any securities held under the LTI Plan while those holdings are subject to performance hurdles or are otherwise unvested. What happens in the event of a change of control? In accordance with the Recovery Incentive Plan rules, the Board has discretion to waive any vesting conditions attached to the performance rights in the event of a change of control. What happens if the executive ceases employment? Unvested performance rights lapse on cessation of employment except to the extent that the Board exercises a discretion to allow them to remain on foot. Generally, where the Board has exercised its discretion in the past it has done so where REA has terminated an executive’s employment with notice (a ‘good leaver’) and in that circumstance has allowed retention of a pro-rata portion (by reference to time served in the performance period), with the unvested rights continuing until the usual performance testing date, without acceleration of vesting. 5.5 Service agreements The table below sets out the main terms and conditions of the employment contracts of the CEO and CFO. All contracts are for unlimited duration. Title Notice Period / Termination Payment CEO / CFO – 9 months for the CEO and 6 months for the CFO (or payment in lieu) – Immediate termination for misconduct, breach of contract or bankruptcy – Statutory entitlements only for termination with cause – Where employment terminates prior to STI or LTI vesting due to resignation or termination for cause, all holdings and short-term incentive payments are forfeited. Good leaver provisions apply as detailed in Section 5.3 Year in review Directors’ Report Financial Statements Remuneration Report Sustainability Our Leaders 57