More annual reports from Mirvac Group:
2023 ReportPeers and competitors of Mirvac Group:
SL Green RealtyMIRVAC GROUP
ANNUAL REPORT
REPORT
2015
M
I
R
V
A
C
G
R
O
U
P
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
5
5
1
0
2
T
R
O
P
E
R
L
A
U
N
N
A
T
S
U
R
T
Y
T
R
E
P
O
R
P
C
A
V
R
I
M
Mirvac Group Annual Report
For the year ended 30 June 2015
Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and its controlled entities
(including Mirvac Property Trust (ARSN 086 780 645) and its controlled entities).
Contents
Directors’ report
Remuneration report
Auditor’s independence declaration
Financial statements
Directors’ declaration
Independent auditor’s report to the members of Mirvac Limited
Securityholder information
Glossary of acronyms
Directory
Page
01
11
31
32
97
98
100
101
102
MIRVAC GROUP ANNUAL REPORT 2015
Directors’ report
The Directors of Mirvac Limited present their report, together with the consolidated report of Mirvac Group (“Mirvac” or “Group”)
for the year ended 30 June 2015. Mirvac comprises Mirvac Limited (“parent entity” or “company”) and its controlled entities,
which includes Mirvac Property Trust (“MPT” or “Trust”) and its controlled entities.
Directors
The following persons were Directors of Mirvac Limited during the whole of the year and up to the date of this report,
unless otherwise stated:
— John Mulcahy
— Susan Lloyd-Hurwitz
— Christine Bartlett (appointed 1 December 2014)
— Peter Hawkins
— Samantha Mostyn (appointed 1 March 2015)
— James M. Millar AM
— John Peters
— Elana Rubin.
Principal activities
The principal continuing activities of Mirvac consist of real estate investment, development and investment management. Mirvac
has two core divisions: Investment (comprising MPT) and Development (comprising residential and commercial development).
There are also two business units, Mirvac Investment Management which comprises third party capital management
(Mirvac Capital (“Capital”)); and the property asset management business (Mirvac Asset Management (“MAM”)).
Dividends/distributions
Dividends/distributions paid to stapled securityholders during the year were as follows:
June 2014 half yearly dividends/distributions paid on 28 August 2014: 4.60 cents per stapled security (“CPSS”) 169.8
June 2013 half yearly dividends/distributions paid on 26 July 2013: 4.50 CPSS
December 2014 half yearly dividends/distributions paid on 26 February 2015: 4.50 CPSS
December 2013 half yearly dividends/distributions paid on 27 February 2014: 4.40 CPSS
166.4
Total dividends/distributions paid
336.2
2015
$m
2014
$m
164.9
161.3
326.2
The June 2015 half yearly dividend/distribution of 4.90 CPSS totalling $181.2m is payable on 26 August 2015.
Dividends/distributions paid and payable by Mirvac for the year ended 30 June 2015 totalled $347.6m, being 9.40 CPSS (2014:
$331.1m — 9.00 CPSS). The payments for the year ended 30 June 2015 and the previous year were distributions made by the Trust.
Operating and financial review
The statutory profit after tax attributable to the stapled securityholders of Mirvac for the year ended 30 June 2015 was $609.9m
(2014: $447.3m). The operating profit (profit before specific non-cash and significant items) was $454.8 (2014: $437.8m) which
is within the market guidance provided previously. Operating profit is a financial measure which is not prescribed by Australian
Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash items and significant items.
The Directors consider operating profit to reflect the core earnings of the Group.
The following table summarises key reconciling items between statutory profit after tax attributable to the stapled securityholders
of Mirvac and operating profit. The operating profit information in the table has not been subject to any specific audit procedures by
the Group’s auditor but has been extracted from note 1 to the accompanying financial statements for the year ended 30 June 2015,
which have been subject to audit; refer to pages 98 and 99 for the auditor’s report on the financial statements.
01
MIRVAC GROUP ANNUAL REPORT 2015
Operating and financial review / continued
Profit attributable to the stapled securityholders of Mirvac
Specific non-cash items
Net gain on fair value of investment properties and investment properties under construction (“IPUC”)
Net loss on fair value of derivative financial instruments and associated foreign exchange movements 1
Security based payments (“SBP“) expense 2
Depreciation of owner-occupied properties (“OOP”) 3
Straight-lining of lease revenue 4
Amortisation of lease fitout incentives 3
Net gain on fair value of investment properties, derivatives and
other specific non-cash items included in share of net profit of joint ventures and associates (“JVA”) 5
Significant items
Impairment of loans, investments and inventories
Restructuring costs 2, 6
Impairment of goodwill
Net (gain)/loss from sale of non-aligned assets 7
Tax effect
Tax effect of non-cash and significant adjustments 8
Operating profit (profit before specific non-cash and significant items)
2015
$m
609.9
(140.8)
10.0
5.6
6.1
(5.3)
9.3
(29.8)
(0.2)
6.8
—
(16.1)
(0.7)
454.8
2014
$m
447.3
(48.8)
15.8
6.5
5.9
(12.2)
10.3
(19.6)
(1.2)
—
24.5
6.0
3.3
437.8
Financial, capital management
and operational highlights
Key financial highlights for the year ended 30 June 2015:
— profit attributable to the stapled securityholders of Mirvac
increased to $609.9m from $447.3m (June 2014);
— restructured the Group’s revolving syndicated bank loan
on more favourable terms and reduced the amount of debt
maturing in any one year. The facility now totals $1,400.0m
(June 2014: $1,388.0m), with $200.0m maturing in FY17,
$350.0m maturing in FY18, $300.0m maturing in FY19,
$300.0m maturing in FY20 and $250.0m maturing in FY21; and
— operating profit after tax of $454.8m 9 (June 2014: $437.8m),
— continued to comfortably meet all debt covenants.
representing 12.3 cents per stapled security (“CPSS”);
— operating cash inflow of $412.7m, which is consistent with
the prior year;
— gearing remained within the Group’s target range of 20.0
to 30.0 per cent at 24.3 per cent 10;
— distributions of $347.6m, representing 9.40 CPSS; and
— net tangible assets (“NTA”) 11 per stapled security of $1.74,
up from $1.66 (June 2014).
Key capital management highlights for the year ended
30 June 2015:
— maintained strong liquidity with $539.6m of cash and undrawn
committed bank facilities held and with no debt maturities
until September 2016;
— reduced average borrowing costs to 5.2 per cent per annum
(including margins and line fees), while maintaining weighted
average debt maturity at 4.3 years;
Key operational highlights for the year ended 30 June 2015:
— acquired $527.0m 12 of key strategic assets in the Investment
portfolio, including Birkenhead Point Outlet Centre, Sydney
NSW and a portfolio of industrial assets from Altis Real Estate
Equity Partnership Fund No. 1 (“Altis”);
— acquired $412.8m of future residential development
projects in key locations, and acquired Leighton
Properties Pty Limited’s 50.0 per cent interest in the
Green Square Consortium;
— entered into an agreement with unlisted property fund
manager ISPT Pty Ltd (“ISPT”) for the sale of a 50.0 per cent
interest in 2 Riverside Quay, Melbourne VIC, for a total
consideration of $106.0m 13. ISPT will fund 50.0 per cent of the
total development costs throughout the construction period;
— disposed of seven assets, comprising five office assets and
two retail assets for a combined total of $406.7m. This follows
the disposal of seven assets sold to an affiliate of Blackstone
Real Estate Asia (“Blackstone”) in July 2014, in addition to
a 50.0 per cent interest in 275 Kent Street, Sydney NSW,
as outlined in the FY14 Annual Report;
1) Total of Gain and Loss on fair value of derivative financial instruments and Foreign exchange loss in the consolidated statement of comprehensive income (“SoCI”).
2) Included within Employee benefits expenses in the consolidated SoCI.
3) Included within Depreciation and amortisation expenses in the consolidated SoCI.
4) Included within Investment properties rental revenue in the consolidated SoCI.
5) Included within Share of net profit of JVA accounted for using the equity method in the consolidated SoCI.
6) Included within Other expenses in the consolidated SoCI.
7) Included within Net gain on sale of assets in the consolidated SoCI.
8) Included in Income tax expense in the consolidated SoCI.
9) Excludes specific non-cash items, significant items and related taxation.
10) Net debt (at foreign exchange hedged rate) excluding leases/(total tangible assets — cash).
11) NTA per stapled security, based on ordinary securities including Employee Incentive Scheme (“EIS”) securities.
12) Pre-transaction costs.
13) The sale price is calculated on the basis of rents determined under the PwC Agreement for Lease, Wilson and MPT car parking leases, and the target net
annual rents for the residual unlet space.
02
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report
Financial, capital management and operational
highlights / continued
Key operational highlights for Investment for the year ended
30 June 2015:
— achieved 2.6 per cent like-for-like net operating income growth;
— maintained high occupancy at 96.5 per cent 8;
— total investment property revaluations provided a net uplift
of $146.2m 9 (or 2.3 per cent) over the previous book value
for the 12 months to 30 June 2015. On a like-for-like basis
(excluding IPUC, acquisitions and disposals), the net uplift
was $136.2m (or 2.4 per cent);
— acquired Birkenhead Point Outlet Centre, Sydney NSW,
including an adjoining car parking facility and marina,
for a total consideration of $310.0m;
— acquired a portfolio of four industrial assets from Altis
for a total consideration of $213.9m, in line with Mirvac’s
strategy to acquire quality assets in key locations;
— disposed of seven assets, comprising five office assets
and two retail assets, for a combined total of $406.7m.
This follows the disposal of seven assets which were sold
to Blackstone in July 2014, in addition to a 50.0 per cent
interest in 275 Kent Street, Sydney NSW, as outlined in the
FY14 Annual Report;
— entered into an exclusive dealing period with Westpac
to finalise documentation for a new lease agreement
at 275 Kent Street, Sydney NSW;
— completed 437 leasing deals over 127,858 square metres of
net lettable area (9.2 per cent of total net lettable area); and
— key development highlights are outlined in the Commercial
highlights section in this report. Key leasing achievements
for assets under development included:
> 200 George Street, Sydney NSW: increased pre-leasing
to 81.0 per cent following the announcement that
Mirvac would relocate its Sydney head office to this new
commercial development. Mirvac will occupy 5,703 square
metres across five floors of the tower for a ten-year term.
Anchor tenant, EY, has pre-committed to approximately
66.0 per cent of office space;
> Orion Springfield Central, Springfield QLD: progressed
with the leasing of the Stage 2 expansion of approximately
32,000 square metres, with 75.2 per cent 10 leased (up from
59.2 per cent at 30 June 2014);
> Harold Park Tramsheds, Sydney NSW: progressed with
leasing for over 6,000 square metres of retail space,
which will include a supermarket, market style food halls,
boutique retailers, cafés, restaurants and a gymnasium
on completion. The project was 58.7 per cent leased
as at 30 June 2015; and
> Stanhope Village, Stanhope Gardens NSW: achieved
practical completion of the Stage 4 expansion in
March 2015, ahead of schedule and 100.0 per cent
leased on completion.
— entered into an exclusive dealing period with financial-
services provider, Westpac, to finalise documentation for
a new lease agreement at 275 Kent Street, Sydney NSW;
— maintained strong portfolio occupancy of 96.5 per cent
within the Investment portfolio 1;
— leased 127,858 square metres (9.2 per cent of total net
lettable area) within the Investment portfolio;
— settled 2,271 residential lots, in line with target of greater than
2,200 lots;
— achieved strong levels of residential exchanged pre-sales
contracts of $1,987.2m 2; and
— achieved 5.1 Star NABERS average energy rating across the
office portfolio.
Outlook 3
Momentum in Australia’s property markets continues to
be divergent across sector and geography, as the economy
continues to rebalance away from very strong levels of mining-
led growth. Low interest rates are expected to remain supportive
over FY16, and together with a projected low Australian dollar,
economic growth is expected to gradually improve, remaining
strongest in New South Wales and Victoria. Mirvac’s deliberate
weighting to New South Wales and Victoria means that it is
well positioned to perform across business cycles. Mirvac’s
mix of passive and active capital will also ensure it continues
to provide stable income and growth to the Group.
Mirvac will remain focused on prudently managing its capital
position by monitoring and accessing diversified sources of
capital, including equity, domestic and international debt and
wholesale capital. This focus will help to ensure Mirvac can
continue to meet its strategic objectives without increasing
its overall capital management risk profile.
Divisional highlights
Investment
At 30 June 2015, Investment (comprising MPT and a small
number of assets held by the Company) had $7,517.7m 4 invested
capital across 59 5 direct property assets, covering the office,
retail and industrial sectors, as well as investments in car parks,
a hotel and other funds managed by Mirvac.
The split of invested capital across each sector was:
— office: 54.6 per cent;
— retail: 28.5 per cent;
— industrial: 8.8 per cent; and
— other: 8.1 per cent 6.
For the 12 months to 30 June 2015, Investment’s statutory profit
before tax was $593.2m (June 2014: $438.1m), driven by an uplift
in property revaluations, and its operating profit before tax was
$418.3m, supported by acquisitions and lower borrowing costs,
offset by the disposal of assets and a 50.0 per cent interest in
275 Kent Street, Sydney at the beginning of the financial year.
Investment’s earnings continued to be secured by a strong
weighted average lease expiry (“WALE”) profile of 4.5 years 7,
92.8 per cent of FY15 rent reviews being linked or fixed to the
Consumer Price Index (“CPI”), and 65.7 per cent of revenue being
derived from multinational, ASX listed and government tenants.
1) By area, excludes indirect property investments, and includes 8 Chifley Square, Sydney NSW.
2) Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds.
3) These future looking statements should be read in conjunction with future releases to the ASX.
4) Includes IPUC, indirect property investments and 8 Chifley Square, Sydney NSW.
5) Includes 8 Chifley Square, Sydney NSW. Although not a direct property asset, it is treated as an investment accounted for using the equity method for
statutory reporting.
6) Includes IPUC, indirect property investments, car park assets and hotel.
7) By income, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments.
8) By area, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments.
9) After adjustment for OOP, the net uplift was $140.8m, including IPUC.
10) As at 31 July 2015.
03
MIRVAC GROUP ANNUAL REPORT 2015 Divisional highlights / continued
The Group demonstrated its ability to create world-class,
sustainable workplaces through a continued focus on
sustainability, with key highlights including:
— a 5.1 Star NABERS average energy rating across the
office portfolio;
— 8 Chifley Square, Sydney NSW achieved a 6 Star Green Star
As-Built v2 rating;
— 200 George Street, Sydney NSW awarded a 6 Star Green Star
— Office Design v3 rating;
— 23 Furzer Street, Phillip ACT achieved the first 6.0 Star
NABERS energy rating for a major office building without
the use of GreenPower. The property has reduced energy
consumption by 32.4 per cent since 2011. The asset boasts
Mirvac’s first large scale solar photovoltaic system, with
an 80 kilowatt solar array, which will see a reduction of
approximately 100 tonnes of greenhouse gas emissions per
annum; and
— received the NSW Green Globes 10-year Sustainability Award
for demonstrating long-term environmental achievements
and successful program delivery and outcomes between
2004 and 2014.
Outlook 1
Global economic activity continues to be mixed, with conditions
continuing to improve in the US, sluggish improvement in
Europe and Japan and cooling growth in China. Domestically,
the economy has recorded slightly below-trend growth,
impacted by significant falls in commodity prices and a
slow-down of investment in the resource sector. However, a low
Australian dollar, a sustained period of low interest rates and
strong investor demand for prime assets are providing support
for activity in the office, retail and industrial sectors. The office
portfolio, with a solid occupancy, embedded rental increases,
quality tenant covenants and a strong weighting to Australia’s
largest office markets, Sydney and Melbourne, continues to
be well positioned. Conditions in the retail sector have been
divergent throughout Australia, with mixed levels of consumer
confidence and soft household income growth. Despite this,
Mirvac’s retail assets, predominantly situated in metropolitan
locations, should continue to benefit from their exposure to
solid catchments in urban markets, particularly Sydney where
67.3 per cent 2 of the portfolio is located and where retail sales
have been robust. Tenant demand for industrial assets in New
South Wales has been moderate over the past year and broadly
meeting the levels of new supply. The industrial portfolio, with
minimal vacancy and a long WALE of 7.6 years 3, continues to
provide steady income to the Group.
Overall, the Investment remains focused on providing secure
passive income to the Group, with key areas of focus including:
— improving the quality of the portfolio via non-aligned asset
sales and creating new product to be held for the long term;
— extracting the benefit of the Group’s demonstrated
For the year ended 30 June 2015, MIM recorded a statutory profit
before tax of $5.1m (June 2014: $5.8m) and an operating profit
before tax of $4.5m.
At 30 June 2015, Capital managed three wholesale funds: Mirvac
Wholesale Residential Development Partnership, Tucker Box
Hotel Group and JF Infrastructure Yield Fund; as well as two
retail funds: Mirvac Development Fund — Seascapes and Mirvac
Development Fund — Meadow Springs.
Capital also acted as investment manager for the Australian
Office Alliance (“Alliance”). The initial asset in the Alliance,
699 Bourke Street, Melbourne, reached practical completion
in April 2015 and is 100.0 per cent leased to AGL.
Prior to 3 December 2014, MIM was also responsible for the
ASX listed Mirvac Industrial Trust (ASX: MIX). On 3 December
2014, Mirvac announced that all MIX units were transferred to
AustFunding Pty Limited, a subsidiary of the Goldman Sachs
Group Inc., as part of the Scheme Implementation Agreement
that was entered into on 19 September 2014.
MAM provides asset management services primarily for the
MPT portfolio. MAM currently manages 61 properties.
Outlook 1
Capital remains focused on establishing investment partnerships
with strategically aligned domestic and international
institutional investors to coinvest alongside Mirvac in office,
industrial, retail and residential assets and development
projects. MAM will also continue to provide asset management
services in accordance with growth in the MPT and Capital
portfolios and in assets owned by third parties where there
are common interests.
Development
Mirvac’s Development business unit operates across
national product lines consisting of Residential (comprising
Masterplanned Communities and Apartments) and Commercial.
At 30 June 2015, Development had $1,579.3m of invested capital.
For the year ended 30 June 2015, Development’s statutory
profit before tax was $126.6m (June 2014: $112.0m) and its
operating profit before tax was $126.6m.
Residential
The business unit continued to deliver quality residential
product in the Group’s core metropolitan markets, with new
release projects targeted at the right price points and right
locations. Key highlights across Masterplanned Communities
and Apartments:
Masterplanned Communities
— Elizabeth Hills and Elizabeth Point NSW: 100.0 per cent of
released lots sold across both projects;
— Alex Avenue NSW: continued strong sales with 83.4 per
cent of released lots pre-sold (267 settled and exchanged
contracts);
competitive advantage in the office sector by creating
innovative, collaborative and flexible workplaces for the future;
— Googong NSW: continued strong sales with 93.1 per cent of
released lots pre-sold (944 settled and exchanged contracts);
— maintaining a focus on the key markets of Sydney and
Melbourne in the office and industrial sectors; and
— Tullamore, Doncaster VIC: achieved strong sales with 96.9
per cent of released lots pre-sold (189 exchanged contracts);
— focusing on quality retail assets located in key urban markets
and unlocking value through the retail development pipeline.
— Woodlea, Rockbank VIC: achieved strong sales with 100.0
per cent of released lots pre-sold (265 exchanged contracts);
Investment Management
Mirvac Investment Management (“MIM”) comprises two business
activities for segment reporting purposes, including third party
capital management (Mirvac Capital (“Capital”)) and property
asset management (Mirvac Asset Management (“MAM”)).
— Jack Road, Cheltenham VIC: achieved strong sales with 87.0
per cent of released lots pre-sold (47 exchanged contracts);
— Harcrest, Melbourne VIC: continued strong sales with 99.6 per
cent of total released lots sold (815 exchanged contracts); and
— Greystone Terraces, Everton Park QLD: achieved solid sales with
58.3 per cent of released lots pre-sold (21 exchanged contracts).
1) These future looking statements should be read in conjunction with future releases to the ASX.
2) By book value.
3) By income.
04
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Divisional highlights / continued
Apartments
— Bondi, Sydney NSW: achieved strong sales with 100.0 per cent
of 190 total lots pre-sold;
— Green Square, Sydney NSW: achieved strong sales with
100.0 per cent of Stage 1, Ebsworth and Stage 2, Ebsworth
No.8 pre-sold (174 and 64 exchanged contracts respectively),
and 98.9 per cent of Ovo pre-sold (221 exchanged contracts);
— Harold Park, Sydney NSW: achieved strong sales with
65.7 per cent of the first release of the final stage, Vance,
pre-sold (71 exchanged contracts);
— Yarra’s Edge, Docklands VIC: commenced construction on
Forge apartments and Wharf’s Entrance terraces following
pre-sales of 63.2 per cent (144 exchanged contracts) and
83.3 per cent (15 exchanged contracts) respectively;
— Waterfront, Unison QLD: achieved 83.3 per cent of pre-sales
for Stage 1 (120 exchanged contracts) with construction
progressing to schedule, and achieved 71.2 per cent of
pre-sales for Stage 2 (104 exchanged contracts), with early
construction works currently underway; and
— Art House, South Brisbane QLD: secured 78.2 per cent pre-sales
for Stage 1 (147 exchanged contracts), with construction
commencing in July 2015.
In addition to the strong sales momentum, Mirvac completed
the englobo sale of provisioned projects Precinct 8 at
Gainsborough Green, QLD and a portion of Glenfield Panorama.
For the year ended 30 June 2015, Development’s residential
pipeline totalled 33,064 lots which was supplemented by the
acquisition of a number of key projects that will contribute
significantly to Development’s future earnings, including:
— Greenbank QLD: acquisition of a masterplanned community
site in Brisbane’s south-west growth corridor with the
potential to deliver approximately 3,300 lots;
— Marsden Park North NSW: entered into a project delivery
agreement to develop a masterplanned community site
within Sydney’s north-west growth centre, with the potential
to deliver over 1,200 lots;
— Gledswood Hills NSW: acquisition of a masterplanned
community site with the potential to deliver approximately
570 lots;
— St Leonards, Sydney NSW: acquisition of a mixed-use
development site in Sydney’s North Shore, with the potential
for approximately 500 apartments and approximately 7,500
square metres of commercial space;
— Sydney Olympic Park, Homebush NSW: entered into a project
delivery agreement to develop an apartment site in Sydney’s
iconic Olympic Park precinct, with the potential to deliver
over 400 lots;
— Claremont on the Park, Claremont WA: acquisition of an
apartment site in the urban renewal area of Claremont Oval,
with the potential to deliver approximately 230 lots;
— Georges Cove Marina, Moorebank NSW: entered into a project
delivery agreement to develop a masterplanned community
site located within Sydney’s south-west growth precinct with
the potential to deliver approximately 180 homes;
— Jack Road, Cheltenham VIC: acquisition of a masterplanned
community site in the bayside suburb of Cheltenham, with the
potential to deliver approximately 180 lots; and
— Darien Street, Bridgeman Downs QLD: acquisition of a
masterplanned community site with the potential to deliver
approximately 120 land lots.
For the year ended 30 June 2015, Development settled 2,271
residential lots and had secured future income of $1,987.2m 1
through residential exchange pre-sales contracts.
State based lot settlements by product for the year ended
30 June 2015 were as follows:
State
NSW
QLD
VIC
WA
Total
Masterplanned
Communities
Apartments
770
252
186
375
1,583
482
13
184
9
688
Total
1,252
265
370
384
2,271
Commercial
Mirvac’s commercial development activities include office,
retail and industrial projects. For the year ended 30 June 2015,
Mirvac’s office development pipeline had an end value
of $3,223.3m on a 100.0 per cent ownership basis.
Key leasing highlights for Commercial for the year ended
30 June 2015 were outlined in the Investment highlights
section of this Report. Key development milestones were:
— 200 George Street, Sydney NSW: demolition and excavation
works complete with the concrete core at Level 36 and the
concrete slabs at Level 32. The project remains on track,
with completion expected in FY16. The office tower has
been awarded a 6.0 Star Green Star — Office Design v3 rating,
and is targeting a 5.0 Star NABERS energy rating and a
6.0 Star Green Star rating;
— 699 Bourke Street, Melbourne VIC: reached practical
completion in April 2015, with fit-out works complete and
major tenant, AGL, moving into the building in June 2015.
The A-grade building with premium-grade services has
achieved a 6.0 Star Green Star — Office Design v2 rating,
demonstrating world leadership in sustainable design,
and is targeting a 5.0 Star NABERS energy rating;
— 2 Riverside Quay, Melbourne VIC: commenced construction
in July 2014, with completion expected in FY17. A 5.0 Stars
NABERS energy rating and a 5.0 Star Green Star Office
Design rating are being targeted;
— Treasury Building, Perth WA: completed the structural core for
the final level of the building in March 2015, with completion
anticipated for the first half of FY16. The A-grade office tower
located on the landmark site of the Old Treasury building is
expected to achieve a 4.5 Star NABERS energy rating and
5.0 Star Green Star rating;
— Orion Springfield Central, Springfield QLD: construction
progressed on the Stage 2 expansion, which will add
approximately 32,000 square metres. The project will
introduce a Coles, Target, Event Cinemas and additional
specialty stores and commercial suites to an expanded town
centre, and is due for completion in the second half of FY16;
— Harold Park Tramsheds, Sydney NSW: commenced
construction in November 2014 for over 6,000 square metres
of retail space, which will include a supermarket, market
style food halls, boutique retailers, cafés, restaurants and a
gymnasium on completion. Mirvac has dedicated 500 square
metres of community space to Sydney Council on completion,
due in the second half of FY16;
— Stanhope Village, Stanhope Gardens NSW: achieved practical
completion of the Stage 4 expansion in March 2015 ; and
— Kawana Shopping World, Buddina QLD: achieved practical
completion of Stage 4 in July 2014, incorporating a new
ALDI supermarket and over 60 specialty stores, expanding
the centre by approximately 9,000 square metres.
1) Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds.
05
MIRVAC GROUP ANNUAL REPORT 2015
Divisional highlights / continued
Outlook 1
The outlook for capital city residential markets remains mixed
by location, however, a sustained low interest rate environment
remains supportive for all markets. Construction of new
dwellings is generally running at a strong pace in the major
capital cities, although concentration is divergent by location.
All major states have recorded solid levels of population
growth, although this has slowed from a very strong pace
in Queensland and Western Australia. New South Wales,
and Sydney in particular, is benefiting from stronger levels
of population and economic growth over the past three years.
Demand for modern, higher density living supported by amenity
and infrastructure is expected to continue, particularly in the
south-eastern states.
Development remains focused on:
— continuing to improve key metrics including return
on invested capital (targeting 12.0 per cent by FY17)
and maintaining solid gross margins;
— strategically restocking the development pipeline with
focus and discipline;
— maintaining a high level of pre-sales to mitigate future
earning risks; and
— delivering the $3.2 billion commercial development pipeline.
Risks
As a property group involved in real estate investment,
residential and commercial development and investment
management, Mirvac faces a number of risks throughout
the business cycle which have the potential to affect the
Group’s achievement of its targeted financial outcomes.
The Group’s objective is to ensure those risks are identified
and appropriate strategies are implemented to control or
otherwise manage the impact of those risks. Mirvac’s risk
management framework is integrated with its day-to-day
business processes and is supported by a dedicated
Group Risk function. Further information on the Group’s
risk management framework is detailed in the Corporate
Governance statement which is available on Mirvac’s website:
www.mirvac.com/about/corporate-governance.
Group risks
For the year ended 30 June 2015, the Group continued
to review both internal and external risks which have the
potential to affect the Group’s targeted financial outcomes
and to implement strategies to minimise their impact. Further
information on the material risks identified for each of the
sectors is outlined below. At a Group level, Mirvac faces certain
risks to achieving of its financial outcomes; these risks are
the types of risks typical for an Australian property group.
These may include debt refinancing and compliance with debt
covenants, compliance with health, safety and environment
regulations as well as broader economic conditions.
Divisional risks
At a divisional level, the key risks faced which have the potential
to affect the achievement of the financial prospects for the
Group include:
— Office: as detailed in the outlook section for Investment,
demand for office space remains challenging across the
markets in which the Group operates. This has the potential
to impact on the Group’s performance given that office assets
represent 54.6 per cent 2 of the Investment portfolio. The
office portfolio, comprising solid occupancy of 94.0 per cent 3,
a WALE of 4.3 years 4 and like-for-like rent growth of 2.6 per
cent, demonstrates Mirvac’s ability to maintain a strong and
robust portfolio through the cycles of demand. The Group
seeks to manage uncertainty around commercial office
demand in a number of ways including substantial pre-letting
of commercial developments in advance of construction, and
by partially selling down commercial developments in advance
of completion;
— Retail: as detailed in the outlook section for Investment,
retail sales growth was divergent throughout Australia
in FY15. Despite encouraging signs in some markets, the
impact of recent below-trend retail sales growth has placed
pressure on retailers. With 28.5 per cent of MPT’s portfolio
represented by retail assets, Mirvac is focused on continually
refreshing its retail assets (via refurbishment, redevelopment
or tenant remixing) to adapt to changing market dynamics.
Furthermore, Mirvac maintains a focus on key metropolitan
markets, and a diversified tenancy mix, where no single
specialty retailer contributes greater than 1.6 per cent
of the total portfolio’s gross rent;
— Industrial: as detailed in the outlook section for Investment,
continuing investor demand for prime-grade industrial assets
in key locations is resulting in compressed capitalisation
rates, weighting predominately towards the stronger markets
of Sydney and Melbourne. Mirvac continues to focus on
properties with long lease terms and secure cash flow profiles
that will benefit from the increase in investor demand and
continue to provide steady returns; and
— Residential: as detailed in the outlook section for
Development, Australia’s residential market varies from
state to state (and within states) with growth in some
markets expected to eclipse a more moderate performance
in others. Despite the breadth of market, the Development
division remains focused on the right product in the right
location, diversifying risk across residential sub-markets,
across Australia and between Masterplanned Communities
and Apartments. Weighting to key growth markets such as
New South Wales further mitigates this risk, as do pre-sales.
1) These future looking statements should be read in conjunction with future releases to the ASX.
2) By invested capital within the Investment division. This includes 472 Pacific Highway and 486 Pacific Highway, St Leonards NSW. Excluding these office assets,
the office portfolio represents 53.9 per cent of the Investment portfolio.
3) By area, includes 8 Chifley Square, Sydney NSW.
4) By income, includes 8 Chifley Square, Sydney NSW.
06
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Environmental regulations
Mirvac and its business operations are subject to compliance
with both Federal and state environment protection legislation,
and the Board is satisfied that adequate systems are in place
for Mirvac’s compliance with the applicable legislation.
Within Mirvac’s health, safety and environment performance
reporting systems, including internal and external audits and
inspections, Mirvac has not experienced any incidents that
have resulted in any significant harm to the environment.
There have been no infringement notices issued for minor
environmental incidents during the reporting period.
A key initiative to reduce greenhouse gas emissions was a
commitment to achieve an average 4.7 Star NABERS Energy
rating on applicable office buildings by July 2014. The Investment
division achieved this target in December 2013, with the office
portfolio now achieving 5.1 Stars. This has resulted in reduced
operating costs, improved environmental performance,
demonstrating excellent energy operational and management
practices, and high efficiency systems and equipment.
The new Mirvac sustainability strategy, ‘This Changes
Everything’, sets short term targets for the whole portfolio to
reduce carbon emissions by 20 per cent and increase energy
generation to 1MW by 2018. This plan also includes a long
term mission to be Net Positive for energy and water by 2030,
whilst achieving zero waste to landfill in the same period.
Mirvac is required under the National Greenhouse and Energy
Reporting Act 2007 to report annually on greenhouse gas
emissions, reductions, removals and offsets, and energy
consumption and production figures.
The Federal Government has introduced into Parliament
legislation that terminates the Energy Efficiency Opportunities
Program and so removes the mandatory requirement for large
energy using businesses to assess opportunities to improve
energy efficiency and to report publicly on the outcomes of
those assessments. The Federal Government has recently
repealed the carbon tax, we will thereby approximately reduce
our energy bill by 10.0 per cent. The carbon tax will be replaced
by direct action, details of which are still being finalised.
Mirvac is also subject to the commercial Building Energy
Efficiency Disclosure Act 2010. This involves the disclosure
of energy efficiency-related information at the point of sale
or lease of office space greater than 2,000 square metres.
07
MIRVAC GROUP ANNUAL REPORT 2015 John Mulcahy
Susan Lloyd-Hurwitz
Christine Bartlett
Peter Hawkins
Information on Directors
Directors’ experience and areas of special responsibilities
The members of the Mirvac Board and their qualifications,
experience and responsibilities are set out below:
John Mulcahy
PhD (Civil Engineering), FIEAust, MAICD
Independent Non-Executive Chair
Chair of the Nomination Committee
Member of the Audit, Risk and Compliance Committee
Member of the Human Resources Committee
John Mulcahy was appointed a Non-Executive Director of Mirvac
on 19 November 2009 and the Independent Non-Executive
Chair on 14 November 2013. John has more than 28 years
of leadership experience in financial services and property
investment. John is the former Managing Director and Chief
Executive Officer of Suncorp-Metway Limited. Prior to joining
Suncorp-Metway, John held a number of senior executive roles
at Commonwealth Bank, including Group Executive, Investment
and Insurance Services. He also held a number of senior roles
during his 14 years at Lend Lease Corporation, including Chief
Executive Officer, Lend Lease Property Investment and Chief
Executive Officer, Civil and Civic.
John is currently a Non-Executive Director of ALS Limited
(formerly Campbell Brothers Limited) (appointed February
2012), Coffey International Limited (appointed September
2009 and as Chair in November 2010) and GWA Group Limited
(appointed November 2010). John is also a Director of The Shore
Foundation Limited and the Great Barrier Reef Foundation and
a former Guardian of the Future Fund Board of Guardians (2006
until April 2015).
Susan Lloyd-Hurwitz
BA (Hons), MBA (Dist)
Chief Executive Officer & Managing Director (“CEO/MD”)
Executive
Susan Lloyd-Hurwitz was appointed CEO/MD on 15 August
2012 and a Director of Mirvac Board on 5 November 2012.
Prior to this appointment, Susan was Managing Director at
LaSalle Investment Management, where she was responsible
for the core investment accounts and funds business lines in
the European region, as well as the operation of the business.
Susan has also held senior executive positions at MGPA,
Macquarie Group and Lend Lease Corporation, working
in Australia, the US and Europe.
Susan has been involved in the real estate funds management
industry for over 25 years, with extensive experience in fund and
portfolio management in both the direct and indirect markets,
fund development, mergers and acquisitions, dispositions,
research and business strategy.
Susan is also President of INSEAD Australasian Council,
a Director of the Green Building Council of Australia and
a member of the UWS Foundation Council which supports
the University of Western Sydney in its development and
contribution to Greater Western Sydney.
Christine Bartlett
BSc, MAICD
Independent Non-Executive
Member of the Audit, Risk and Compliance Committee
Christine was appointed a Non-Executive Director of Mirvac
on 1 December 2014. She is currently a Non-Executive
Director of GBST Holdings Ltd (appointed June 2015) and
a Director of The Smith Family. Christine is a member of
the Minter Ellison Advisory Council, the UNSW Australian
School of Business Advisory Council and the Australian
Institute of Company Directors. Previously she has been a
director of PropertyLook, National Nominees Ltd and Deputy
Chairman of the Australian Custodial Services Association.
Christine is an experienced CEO and senior executive with
extensive line management experience gained through
roles with IBM, Jones Lang LaSalle and National Australia
Bank Limited. Her executive career has included Australian,
regional and global responsibilities based in Australia, the
USA and Japan. Christine brings a commercial perspective
especially in the areas of financial discipline, identifying risk,
complex project management, execution of strategy, fostering
innovation and taking advantage of new emerging technologies.
Christine holds a Bachelor of Science from the University
of Sydney and has completed senior executive management
programs at INSEAD.
Peter Hawkins
BCA (Hons), FAICD, SFFin, FAIM, ACA (NZ)
Independent Non-Executive
Chair of the Human Resources Committee
Member of the Audit, Risk and Compliance Committee
Member of the Nomination Committee
Peter Hawkins was appointed a Non-Executive Director of Mirvac
on 19 January 2006, following his retirement from ANZ after
a career of 34 years. Prior to his retirement, Peter was Group
Managing Director, Group Strategic Development, responsible
for the expansion and shaping of ANZ’s businesses, mergers,
acquisitions and divestments and for overseeing its strategic
cost agenda.
Peter was a member of ANZ’s Group Leadership Team and sat
on the boards of Esanda Limited, ING Australia Limited and
ING (NZ) Limited, the funds management and life insurance
joint ventures between ANZ and ING Group. He was previously
Group Managing Director, Personal Financial Services, as well
as holding a number of other senior positions during his career
with ANZ. Peter was also a Director of BHP (NZ) Steel Limited
from 1990 to 1991 and Visa Inc. from 2008 to 2011.
Peter is currently a Non-Executive Director of Westpac Banking
Corporation (appointed December 2008), MG Responsible Entity
Limited, the responsible entity for MG Unit Trust (appointed April
2015 and listed in July 2015), Murray Goulburn Co-operative Co.
Limited, Clayton Utz and Liberty Financial Pty Ltd, and a former
Non-Executive Director of Treasury Corporation of Victoria.
08
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report James M. Millar AM
Samantha Mostyn
John Peters
Elana Rubin
Information on Directors / continued
James M. Millar AM
BCom, FCA, FAICD
Independent Non-Executive
Chair of the Audit, Risk and Compliance Committee
Member of the Nomination Committee
James M. Millar was appointed a Non-Executive Director of
Mirvac on 19 November 2009. He is the former Chief Executive
Officer of Ernst & Young (“EY”) in the Oceania Region, and was
a director on their global board.
James commenced his career in the Insolvency &
Reconstruction practice at EY, conducting some of the largest
corporate workouts of the early 1990s. He has qualifications
in both business and accounting.
James is a Non-Executive Director of Fairfax Media Limited
(appointed July 2012), Helloworld Limited (appointed
September 2010) and Macquarie Radio Network Limited
(appointed April 2015). He is Chair of both the Export Finance
and Insurance Corporation (appointed December 2014) and
Forestry Corporation NSW (appointed March 2013).
James serves a number of charities where he is the Chair
of The Smith Family, and is a Trustee of the Australian
Cancer Research Foundation and the Vincent Fairfax Family
Foundation. He is a former Chair of Fantastic Holdings Limited
(from May 2012 until June 2014).
Samantha Mostyn
BA, LLB
Independent Non-Executive
Member of the Human Resources Committee
Samantha Mostyn was appointed a Non-Executive Director of
Mirvac on 1 March 2015. Samantha is a Non-Executive Director
and corporate advisor and is currently a Non-Executive Director
of Virgin Australia Holdings Limited (appointed September
2010), Transurban Holdings Limited (appointed December 2010)
and Cover-More Group Limited (appointed December 2013).
She is also a Director on an Australian APRA regulated Citibank
Subsidiary Board. Samantha also serves on the Climate Council,
Climate Works Australia, the Advisory Board of the Crawford
School of Government and Economics at the Australian National
University and is the President of the Australian Council for
International Development. She is Deputy Chair of the Diversity
Council of Australia, and has served as an AFL Commissioner
since 2005. Her other current board appointments include
the Australia Council for the Arts, Australian Volunteers
International, the GO Foundation and Carriageworks.
Previously, Samantha has served as a Director of the Sydney
Theatre Company, a Commissioner with the National Mental
Health Commission, and has held senior executive positions
at IAG, Optus and Cable & Wireless Plc.
John Peters
BArch, AdvDipBCM, GAICD
Independent Non-Executive
Member of the Human Resources Committee
John Peters was appointed a Non-Executive Director of Mirvac
on 17 November 2011.
John brings to the Board over 40 years’ experience in
architectural design, project management, property
development and property management.
For the last 20 years, John has been the principal of a private
property development company focused on substantial
mixed use developments and redevelopments in South East
Queensland. During this period, he has also consulted to various
investors and other financial stakeholders in several Queensland
development projects.
Prior to this, John was with Lend Lease Corporation for 14 years,
where he was Queensland Manager Lend Lease Development,
and Director, Lend Lease Commercial.
Elana Rubin
BA (Hons), MA, FFin, FAICD, FAIM
Independent Non-Executive
Member of the Audit, Risk and Compliance Committee
Member of the Nomination Committee
Elana Rubin was appointed a Non-Executive Director of Mirvac
on 11 November 2010 and has extensive experience in property
and financial services. Elana is a Director of several NAB life
insurance and asset management subsidiaries and a Director
of Touchcorp Limited (appointed January 2015), Transurban
Queensland (previously Queensland Motorways Holding Pty
Limited) and the Victorian Funds Management Corporation.
She is also a member of the Qualitas Properties Advisory Board,
Committee for Melbourne and the Victorian Council of the
Australian Institute of Company Directors.
Elana is the former Chair of AustralianSuper (July 2007 to
April 2013), one of Australia’s leading superannuation funds,
having been on the board since 2006. She was a Director of
Victorian WorkCover Authority (December 2001 to February
2012) and Chair from 2006. She was also a Director of Mirvac
Funds Management Limited, the responsible entity and trustee
for Mirvac’s listed and unlisted funds, from November 2013 to
February 2015.
Elana was previously a Non-Executive Director of TAL Life Limited
(formerly Tower Australia Limited) (from November 2007 to April
2013) and has been a Director on a number of listed companies
and other entities including Bravura Solutions Ltd. Elana is a
former member of the Federal Government’s Infrastructure
Australia Council (from May 2011 to September 2014).
09
MIRVAC GROUP ANNUAL REPORT 2015 Information on Directors / continued
Company Secretaries
Sean Ward
BEc, BComm, FGIA, FFin
Sean Ward was appointed Company Secretary on 23 August 2013.
Sean joined Mirvac as Group Company Secretary in April 2013
and has more than 15 years’ corporate experience. Prior to
joining Mirvac, Sean was the Head of Subsidiaries at Westpac
Banking Corporation, providing company secretarial support
for all of Westpac’s listed and unlisted entities and before this
was a Senior Companies Advisor at ASX Limited. Sean is also
currently studying for a Master of Business Administration
with the Australian Graduate School of Management.
Natalie Allen (resigned 26 June 2015)
BEc, LLB, GAICD
Natalie Allen was appointed Company Secretary on 21 January
2013. Natalie joined Mirvac as Group General Counsel in
August 2012, and has more than 16 years of legal experience
in real estate and equity capital markets. Prior to joining Mirvac,
Natalie was the Group General Counsel and Company Secretary
at Charter Hall Group, and before this was General Counsel
and Company Secretary for a number of listed and unlisted
entities within Macquarie’s Real Estate Funds division. Natalie
is a solicitor of the Supreme Court of NSW, a member of the
State Bar of California and a graduate of the Australian Institute
of Company Directors. Natalie resigned as Company Secretary
on 26 June 2015.
Meetings of Directors
The number of meetings of the Board of Directors and of each standing Board committee, of which the relevant Director was a
member, held during the year ended 30 June 2015 and the number of meetings attended by each Director are detailed below:
Director
John Mulcahy
Susan Lloyd-Hurwitz
Christine Bartlett 2
Peter Hawkins
Samantha Mostyn 3
James M. Millar AM
John Peters
Elana Rubin 4
Board
B
Board
Committee 1
B
A
Audit, Risk and
Compliance
Committee
(“ARCC”)
B
A
Human
Resources
Committee
(“HRC”)
B
A
15
15
9
15
5
15
15
13
2
3
—
—
—
—
1
—
2
3
—
—
—
—
1
—
6
—
4
6
—
6
2
6
6
—
4
6
—
6
2
6
5
—
—
5
2
3
2
—
5
—
—
5
2
3
2
—
A
15
15
9
15
5
14
15
13
Nomination
Committee
B
A
2
—
—
2
—
2
—
2
2
—
—
2
—
2
—
2
1) Committees of the Board established to deal with particular purposes during the year.
2) Christine Bartlett was appointed as a Director on 1 December 2014.
3) Samantha Mostyn was appointed as a Director on 1 March 2015.
4) Elana Rubin did not attend two Board meetings due to a potential conflict of interest.
A) Indicates the number of meetings attended during the period the Director was a member of the Board or Committee.
B) Indicates the number of meetings held during the period the Director was a member of the Board or Committee
(excluding meetings not attended due to a potential conflict of interest).
10
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report
Remuneration report
Contents
Summary of FY15 remuneration
Our people
Our remuneration strategy and the link to business strategy
Actual remuneration earned in FY15
Executive KMP remuneration at Mirvac
Business and executive remuneration outcomes
1
Introduction — key questions
2 Who is covered by this report
3
4
5
6
7
8
9 Mirvac’s approach to executive remuneration
10 How remuneration is structured
11
12
13
14 Non-Executive Directors’ remuneration
15
16 Additional required disclosures
LTI grants in FY15
Total remuneration in FY15
Service agreements for the Executive KMP
Legacy remuneration arrangements
Page
11
12
13
13
14
15
16
16
19
20
23
24
24
24
26
26
Please see page 29 for definitions of terms used in this remuneration report.
1
Introduction — key questions
Key questions
Mirvac approach
Remuneration in 2015
1) How is Mirvac’s
performance
reflected in this year’s
remuneration outcomes?
Mirvac’s remuneration outcomes are strongly linked to the delivery of sustainable
securityholder value over the short and long term. Increased corporate earnings
and high performance across non-financial measures have resulted in above target
performance on our balanced scorecard and a corresponding higher than usual payout
of short-term incentives (“STI”).
However, vesting of our long-term incentive (“LTI”) awards will be substantially
lower than in FY14, largely as a result of impairment losses in our residential property
business during FY13 which reduced our return on equity. The LTI outcome reflects
our commitment to ensuring executives’ remuneration reflects the achievement of
sustainable value for securityholders.
2) What changes have been
made to the remuneration
structure in FY15?
The only changes to our remuneration approach this year were to increase the
Non-Executive Director (“NED”) fee pool (as approved by securityholders at the
2014 AGM) and to simplify the fee structure for Non-Executive Directors. Individual
NED fee levels remain in line with FY14. No changes have been made to the executive
remuneration structure.
3) Are any changes
planned for FY16?
Remuneration framework
The only change planned for FY16 is an increase to the threshold and stretch
performance levels for LTI awards. The threshold level for ROIC is proposed to rise
from 7.5 per cent to 8 per cent, and the stretch from 9 per cent to 10 per cent.
The increase reflects Mirvac’s expectations for returns through the cycle, and
over the longer term. The TSR measure for LTI awards remains unchanged.
4) Where does Mirvac’s
remuneration sit
against the market?
Fixed and variable pay are both aimed at the market median, with remuneration
opportunities for outstanding performance extending up to the 75th percentile
of the market.
5) What proportion of
remuneration is “at risk”?
The majority of Executive KMP’s remuneration is based on performance, and is
therefore at risk.
6) Are there any clawback
provisions for incentives?
Yes. If there is a material financial misstatement, any unvested LTI or deferred STI
awards can be clawed back.
7) What is Mirvac’s
minimum securityholding
requirement?
The CEO/MD must maintain a minimum securityholding of 100 per cent of fixed
remuneration. Other Executives must hold 50 per cent of their fixed remuneration.
Non-Executive Directors must hold 25,000 securities.
Short-term incentives (“STI”)
8) Are any STI payments
deferred?
Yes, 25 per cent of STIs are awarded as rights over Mirvac securities, half of which vest
in one year and half in two years. If the Executive leaves Mirvac before the vesting
period ends, the rights do not vest and are cancelled.
9) Are STI payments
Yes, an Executive can earn a maximum of double their STI target.
capped?
Further info
Section 5
Page 14
Section 14
Page 24
Section 10
Page 20
Section 9
Page 19
Section 7
Page 16
Section 10
Page 20
Section 9
Page 19,
Section 14
Page 24
Section 7
Page 16
Section 10
Page 20
11
MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued
Key questions
Mirvac approach
Long-term incentives (“LTI”)
10) What are the performance
measures that determine
if the LTI grants vest?
Half of the LTI awards are based on relative TSR. The other half was based on
ROE for the FY13 LTI award, and ROIC for awards made in subsequent years.
11) Does the LTI have
No, there is no re-testing.
re-testing?
12) Are dividends/
distributions paid on
unvested LTI awards?
No dividends/distributions are paid on unvested LTI awards. This ensures that
Executives are only rewarded when performance hurdles have been achieved
at the end of the performance period.
13) Is the size of LTI grants
increased in light of
performance conditions?
No. LTI grant amounts are not increased to reflect the performance conditions
necessary for vesting.
14) Can LTI participants
No.
hedge their unvested LTI?
15) Does Mirvac buy
securities or issue
new securities for
share-based awards?
16) Does Mirvac issue
share options?
Executive agreements
17) What’s the maximum an
executive can receive
on termination?
For deferred STI awards, securities are purchased on-market. For LTI awards,
the Board decides whether to issue new securities or buy them on-market.
No.
Executive KMP termination entitlements are limited to 12 months’ fixed remuneration.
Further info
Section 10
Page 20
Section 10
Page 20
Section 10
Page 20
Section 10
Page 20
Section 10
Page 20
Section 10
Page 20
Section 13
Page 24
2 Who is covered by this report?
This report covers the key management personnel (“KMP”) of Mirvac, who are the people responsible for determining and executing
Mirvac’s strategy. This includes both the Executive KMP (including the CEO/MD, the Chief Financial Officer (“CFO”) and heads of
business units who sit on the Executive Leadership Team) as well as Non Executive Directors.
There were seven Executive KMP in FY15, compared to the five that were disclosed in FY14, as a result of changes to the Executive
Leadership Team structure during FY15. There have also been two changes to Non-Executive Directors. For the year ended 30 June
2015, the KMP were:
KMP
Position
Term as KMP
Non-Executive Directors
John Mulcahy
Christine Bartlett
Peter Hawkins
James M. Millar AM
Samantha Mostyn
John Peters
Elana Rubin
Chair
Director (appointed 1 December 2014)
Director
Director
Director (appointed 1 March 2015)
Director
Director
Executive KMP
Susan Lloyd-Hurwitz
Andrew Butler
John Carfi
Brett Draffen
Shane Gannon
Susan MacDonald
David Rolls
CEO/MD
Group Executive, Office & Industrial
Group Executive, Residential Development
Chief Investment Officer
CFO
Group Executive, Retail
Group Executive, Commercial Development
Full Year
Part Year
Full Year
Full Year
Part Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
The information provided in this Remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
12
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Remuneration report / continued
3 Summary of FY15 remuneration
Strong revenue and profit growth over the past year are reflected in above-target STI payouts. However, write-downs
have reduced our return on equity over the last three years, resulting in reduced LTI vesting.
Fixed remuneration
Fixed remuneration increases
The responsibilities of Brett Draffen and Susan MacDonald were increased in the restructure on 1 July 2014.
As a result, their fixed remuneration was also increased.
CEO/MD remuneration Remuneration changes for CEO/MD
The CEO/MD’s fixed remuneration was not increased during FY15 as it remained competitive with the
market. Total remuneration for the CEO/MD in the table in section 6 increased from $2.8m to $3.9m
in FY15, due a larger STI outcome, and the partial vesting of the FY13 LTI award.
STI
LTI
Increased STI payouts
Strong results across all operating metrics resulted in increased STI payouts.
The FY15 STI pool was 137% of target in FY15 (up from 110% in FY14), driven by
— operating earnings increasing to $454.8m from $437.8m
— ROIC performance improving to 9.0% from 7.8%
— achieving target for all 12 non-financial measures.
As a result, average STI payouts for Executive KMP increased from 116% of target in FY14 to 140% in FY15.
Vesting at 36.5%, reflecting below-target ROE and above-target TSR
Vesting of LTI grants is dependent on achieving target on ROE and TSR over a three year period.
This year’s vesting was impacted by below-target ROE performance, largely due to impairments recognised
in the performance period. This resulted in none of the awards relating to the ROE hurdle vesting.
TSR performance was above threshold but below maximum, resulting in 73% of the awards subject
to the TSR hurdle vesting.
As a result, 36.5% of overall LTI awards vested.
Non-Executive Director
fees
Non-Executive Director fee pool increased after approval at the 2014 AGM
An increase in the maximum aggregate Non-Executive Director annual remuneration from $1.95m to
$2.25m was approved at the 2014 AGM.
Non-Executive Director fee structure simplified
The individual committee member fees have been replaced with a single fee of $18,000 per annum for
serving on one or more Board committees. The previous fees paid to the Chairs of the ARCC and the
HRC have been replaced with a fee of $30,000 per annum, which is in addition to the committee fee.
Individual NED fee levels remain in line with FY14.
4 Our people
At Mirvac, we believe that creating the right workplace culture will help us to attract, retain and motivate talented individuals.
At Mirvac, our remuneration strategy is one element of our overall people strategy, designed to create a distinctive culture that
helps us attract, grow, engage and retain high-quality employees.
In FY15, our people strategy focused on diversity, inclusion and innovation, as we strove to create an environment that encourages
the unique talents and experiences of our people.
Initiatives included the creation of a flexible work program that will underpin our transition to our new headquarters in 2016; the
introduction of an innovative new induction process to introduce new starters to our culture and organisation; and our sponsorship
of the Equilibrium Man Challenge, a micro-documentary that follows a group of men moving to flexible working arrangements.
Mirvac’s innovation program, Hatch, also trained 45 Innovation Champions to act as advocates of innovation throughout the
company — driving behaviours, and embedding cultural change at the front line.
Mirvac’s efforts to create an inclusive and innovative culture are reflected in the achievement of a ‘Best Employer’ status
based on our employee engagement survey with AonHewitt, and recognition by the Workplace Gender Equality Agency as an
‘Employer of Choice for Gender Equality’. We are also particularly proud of the fact that the Mirvac Board achieved 50/50 gender
representation in FY15.
Our remuneration strategy — for our executives, and for our people — supports our people strategy by rewarding high performance
that supports our distinctive culture.
13
MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued
5 Our remuneration strategy and the link to business strategy
At Mirvac, our remuneration is linked to the drivers of our business strategy, helping to create sustainable value for shareholders.
Mirvac’s remuneration strategy is designed to support and reinforce its business strategy. The at-risk components of remuneration
are tied to measures that reflect the successful execution of our business strategy in both the short and long term.
Our strategic drivers...
Are reflected in STI
performance measures...
And LTI performance
measures...
So Mirvac’s actual
performance...
Directly affects what
executives are paid
Relative Total
Shareholder Return
(“TSR”)
Measures the
performance of Mirvac
securities over time,
relative to other entities
in a comparison group.
Return on Equity (“ROE”)
Measures Mirvac’s
profitability relative
to securityholders’
investment in the Group.
From FY13 – FY15
— Mirvac’s TSR was
ranked at the 62nd
percentile relative to
its comparison group.
— Mirvac’s average
annual ROE is 6.7%
In FY15
— Operating earnings
were $454.8m, up
4% from $437.8m
in FY14
— ROIC was 9.0% up
from 7.8% in FY14.
In FY15
— Mirvac achieved
12 out of the 12
non-financial targets.
Capital efficiency and
financial performance
Deliver top 3
AREIT returns.
Operating earnings
Reflects how much
revenue the business has
generated for the year,
less operating costs.
Return on Invested
Capital (“ROIC”)
Measures Mirvac’s
profitability relative to its
total assets. It is calculated
by dividing the company’s
annual earnings by its
total assets.
Customer / investor
satisfaction measures:
Measures include retail
customer and office
tenant satisfaction
surveys, as well as
residential customer
satisfaction surveys.
Customer and
investor satisfaction
Provide customers and
investors an experience
that delivers excellence,
consistently exceeds
expectations and
engenders loyalty.
High performing
people and culture
Have an engaged and
motivated workforce
with superior skills
and capabilities.
People measures:
Measures include talent
turnover, diversity
targets, and succession
planning targets.
HSE&S leadership
Be recognised as a
leader in sustainability.
Provide workplaces
free from harm and
supported by a culture
where safety remains
an absolute priority.
HSE&S leadership
measures:
Measures include
Lost Time Injury
Frequency Rate, timely
incident reporting, and
sustainability targets.
LTI
vesting
outcome
in FY15
= 36.5%
of target
CEO/MD
STI
outcome
in FY15 =
164% of
target
Average
STI in
FY15 for
other
eligible
Senior
Executives
= 136%
of target
See section 8, page 16
for additional details
See section 8, page 16
for additional details
See section 8, page 16
for additional details
14
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Remuneration report / continued
6 Actual remuneration earned in FY15
This year’s remuneration reflected our ongoing commitment to paying for performance. Strong FY15 business performance
resulted in increased STI payouts, but LTI vesting was substantially lower than FY14.
The following table sets out the actual value of the remuneration earned by Executive KMP members during the year. The figures in
this table are different from those shown in the accounting table in section 12 because that table includes an apportioned accounting
value for all unvested LTI grants during the year (some of which remain subject to satisfaction of performance and service conditions
and may not ultimately vest). The table below, on the other hand, shows the LTI value based on the awards that actually vested as a
result of performance in FY15.
The table below presents:
— Fixed remuneration;
— Cash STI: the non-deferred portion of STI payments to be made in September 2015 in recognition of performance during FY15;
— Deferred STI realised: the value of the deferred STI from prior years that was realised in FY15; and
— LTI: the value to the participant during FY15 of performance rights whose performance period ended 30 June 2015.
Actual remuneration paid in FY15
Executive KMP
Susan Lloyd-Hurwitz
Andrew Butler
John Carfi 3
Brett Draffen
Shane Gannon
Susan MacDonald 3
David Rolls 3
Fixed
remuneration
$
Year
Cash
STI
$
Deferred
STI
realised
$
Employee Termination
benefits
$
loans 1
$
LTI
$
Other 2
$
Total
$
2015
2014
2015
2014
2015
2015
2014
2015
2014
2015
2015
1,500,000
1,500,000
1,381,641
1,160,156
212,926
—
767,963
—
—
—
700,000
700,000
550,200
415,800
76,313
—
337
14,163
—
600,159
700,000
481,425
—
21,051
—
331,872
817,353
—
581,835
950,000
900,000
900,000
527,962
933,375
647,460
707,400
365,878
700,000
481,425
700,000
481,425
118,829
—
67,149
—
—
—
—
—
379,836
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
24,046 3,886,576
2,795,094
134,938
10,977
319,418
1,337,827
2,049,540
11,353
1,213,829
15,368 2,349,444
3,411,350
464,702
234,685 4 1,909,234
1,249,454
355,614
11,353
1,572,614
11,353
1,192,778
1) Amount reported includes amounts forgiven during the year, imputed interest and related fringe benefits tax (“FBT”).
2) Includes long service leave accrued during the year.
3) Appointed to a KMP position effective 1 July 2014.
4) Includes a payment of $220,000 as part compensation for the STI and LTI entitlements he forfeited on resigning from his previous employer.
15
MIRVAC GROUP ANNUAL REPORT 2015
Remuneration report / continued
7 Executive KMP remuneration at Mirvac
Mirvac’s executive remuneration approach is strongly performance focused.
A significant proportion of executive remuneration is based on sustained performance, aligned with the business strategy.
Our executive remuneration is:
1) Performance based: more than 60 per cent of total remuneration is “at-risk”;
2) Equity focused: almost half the CEO/MD’s total remuneration is paid in equity and a third of other Executive KMP members total
remuneration is paid in equity;
3) Increases ownership: Executive KMP members are required to hold securities of a minimum value of 50 per cent of their fixed
remuneration, and the CEO/MD is required to hold 100 per cent; and
4) Multi-year focused: 50 per cent of STI deferral is subject to a one-year holding lock and the remaining 50 per cent to a two-year
holding lock. LTI performance is measured over a three year period.
The graphs below set out the remuneration structure and mix for the CEO/MD and other Executive KMP members at Mirvac.
CEO/MD
Fixed remuneration
31%
Target STI
23%
Max LTI
46%
PERFORMANCE DEPENDENT
Cash
17%
Deferred
6%
TSR (50% of award)
23%
ROIC (50% of award)
23%
50% deferred for 12 months
50% deferred for 24 months
Subject to clawback
Granted as performance rights
with performance measured over a
three year period. Subject to clawback
Other Executive KMP
Fixed remuneration
40%
Target STI
30%
Max LTI
30%
PERFORMANCE DEPENDENT
Cash
22.5%
Deferred
7.5%
TSR (50% of award)
15%
ROIC (50% of award)
15%
50% deferred for 12 months
50% deferred for 24 months
Subject to clawback
Granted as performance rights
with performance measured over a
three year period. Subject to clawback
Financial performance vs average STI outcome
160% of target
140
120
100
80
8 Business and executive remuneration outcomes
STI and LTI outcomes reflect and reward the strong results
across all measures of performance in FY15.
a) How the Group’s performance has translated
into STI awards
FY15 performance was strong, with both operating earnings
and ROIC significantly higher than FY14. The Group’s STI
scorecard of 137 per cent (of a potential 150 per cent) reflects
this achievement.
Mirvac’s financial performance directly affects the STI awards
in two ways:
— the STI has a gateway requirement of Group operating
earnings being at least 90 per cent of target; and
— the Group’s STI scorecard has two financial measures, each
worth 35 per cent of the total pool: operating earnings and ROIC.
60
The following graph shows how the average STI outcome
for all employees has been closely tied to performance on
these two measures since FY11. The increase in STI outcome
for FY15 reflected Mirvac achieving stretch targets for the
non-financial measures, in addition to the strong performance
on the financial measures.
40
16
FY11
FY12
FY13
FY14
FY15
Operating earnings
ROIC
Average STI
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Remuneration report / continued
Financial performance in each case is expressed as a percentage of the business target set for the year, while the STI outcome
represents the average STI award to participants that year as a percentage of target.
b) STI awards in FY15
The diagram below sets out Mirvac’s performance and the resulting STI outcomes:
Gateway achieved (over 90% of target operating earnings achieved)
Threshold 75%
Target 100%
Stretch 150%
Operating earnings (weighting = 35%)
% of plan awarded = 112%
ROIC (weighting = 35%)
% of plan awarded = 150%
Non-financial measures (weighting = 30%) % of plan awarded = 150%
HRC approved a Group STI score of 137% of target (from a maximum potential pool of 150% of target)
FY15 STI pool = $29.2 million (6.4% of Mirvac’s operating earnings)
Each participant is awarded an individual STI score between zero and 135% of their STI target.
Scores are based on an assessment of their personal performance for the year against
objectives linked to Mirvac’s strategic drivers
Once the Group and Individual STI scores are determined, an individual’s STI award is calculated as follows:
Fixed
remuneration
Individual
STI target
Group
STI score
(0-150%)
Individual
STI score
(0-135%)
Individual
STI award
(capped at 200%
of target)
Executive KMP STI awards in FY15
The following table shows the actual STI outcomes for each of the Executive KMP for FY15.
Susan Lloyd-Hurwitz
Andrew Butler
John Carfi
Brett Draffen
Shane Gannon
Susan MacDonald
David Rolls
STI target
% of fixed
remuneration
STI max
% of fixed
remuneration
Actual STI
% max
STI forfeited
% max
75
80
70
80
80
70
70
150
160
140
160
160
140
140
82
66
66
82
66
66
66
18
34
34
18
34
34
34
Actual STI
(total)
$
1,842,188
733,600
641,900
1,244,500
943,200
641,900
641,900
c) How the Group’s performance has translated into LTI awards
The three years to 30 June 2015 saw varied performance levels. The Group’s TSR was above the median of the comparator group,
reflecting our focus on above-market, sustainable growth. This solid result is reflected in the vesting of 73 per cent of the FY13 award
relating to TSR.
The Group did not meet the threshold performance hurdle on ROE, largely due to impairments announced during the three-year
performance period. As a result, the 50 per cent of the FY13 award that related to ROE will not vest.
Mirvac’s financial performance directly affects the vesting of the LTI awards:
— half of the LTI is subject to a relative TSR performance measure; and
— the remaining half is subject to ROE (for grants made up to and including FY13) and ROIC (for grants made from FY14 onwards).
17
MIRVAC GROUP ANNUAL REPORT 2015
Remuneration report / continued
The diagram below sets out the Group’s performance and the resulting LTI outcomes for the Executive KMP.
FY13 LTI grants made to eligible participants and TSR and ROE performance hurdles are set
30 June 2015: three year performance period ends for the FY13 grants and performance is measured for TSR and ROE
Mirvac’s share price & distributions over the last five years
Mirvac TSR (1 July 2012 – 30 June 2015)
$350m
300
250
200
150
100
50
0
$2.0
120%
1.5
100%
80%
1.0
60%
0.5
40%
20%
0
0%
FY11
FY12
FY13
FY14
FY15
30 Jun 12
30 Jun 13
30 Jun 14
30 Jun 15
Distributions paid ($m)
Security price at 30 June ($)
MGR
25th Percentile
50th Percentile
75th Percentile
Mirvac achieved a TSR of 85 per cent over the three year performance period, which positioned it at the 62nd percentile
relative to the entities in the comparison group
73% of the performance rights linked to the TSR measure vested
ROE performance
Mirvac’s ROE performance over the three years
Mirvac’s ROE has fluctuated over the last three years:
12
— FY13 did not meet the threshold;
— FY14 exceeded the threshold; and
— FY15 exceeded the threshold.
Mirvac’s average annual ROE over the three
year performance period was 6.7 per cent,
resulting in below threshold performance.
9.9
7.4
Stretch = 11
Threshold = 7
6.7
E
O
R
6
0
2.9
FY13
FY14
FY15
3 year
average
None of the performance rights linked to the ROE measure vested
36.5% Vesting of the total FY13 LTI award
18
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report Remuneration report / continued
Executive KMP vesting outcomes in FY15
The performance outcomes resulted in the following individual vesting results:
Executive KMP
Susan Lloyd-Hurwitz
John Carfi
Brett Draffen
Susan MacDonald
Rights granted in FY13
Rights vested in FY15
Rights forfeited in FY15
Number
1,137,300
30,367
489,800
127,131
% of
Value ($) 1 total grant
816,013
21,788
351,432
91,216
36.5
36.5
36.5
36.5
Number
415,144
11,083
178,777
46,402
% of
Value ($) 1 total grant
Number
Value ($) 1
297,845
7,953
128,273
33,294
63.5
63.5
63.5
63.5
722,186
19,284
311,023
80,729
518,168
13,835
223,159
57,922
1) Value of the grant has been estimated based on the fair value as calculated at the time of the grant.
Executive KMP vesting outcomes for the past three years
A summary of vesting under Mirvac’s performance-hurdled equity grants that have vested in the last three years is shown in the
following table:
Grant year
Performance hurdle
Test date
Vested
Lapsed
FY11
FY12
FY13
TSR
TSR and ROE
TSR and ROE
30 June 2013
30 June 2014
30 June 2015
0%
77%
36.5%
100%
23%
63.5%
9 Mirvac’s approach to executive remuneration
The Board, Human Resources Committee, advisors and management work closely to apply our remuneration principles and
ensure our strategy supports sustainable securityholder value.
Mirvac’s remuneration strategy is designed to attract, motivate and retain the individuals who are best equipped to successfully
execute the business strategy.
a) How remuneration decisions are made
Roles and responsibilities
Board
Oversees remuneration
With advice from
Human Resources Committee
› Four independent NED members
› Advises Board on remuneration strategy
› Specific recommendations on
Director remuneration
› Approves KMP terms of employment
Based on
Remuneration principles
› Align and contribute to Mirvac’s key strategic business objectives and desired
business outcomes
› Align the interests of employees with those of securityholders
› Assist Mirvac in attracting and retaining the employees required to execute the business strategy
› Support Mirvac’s desired performance-based culture
› Encompass the concept of pay parity and be fair and equitable
› Be simple and easily understood
19
MIRVAC GROUP ANNUAL REPORT 2015
Targeted market positioning
Fixed remuneration at Mirvac is positioned at the median (50th
percentile), with flexibility based on:
— the criticality of the role to successful execution of the
business strategy;
— assessment of employee performance/potential; and
— the employee’s experience level.
Target total remuneration is comprised of fixed remuneration,
STI and LTI and is positioned at the median (50th percentile)
with the opportunity to earn total remuneration up to the upper
quartile (75th percentile) in the event that both the individual
and the business achieve stretch targets.
Minimum securityholding guidelines
Executive KMP members are expected to establish and
maintain a securityholding to the value of 100 per cent
of fixed remuneration for the CEO/MD and 50 per cent of
fixed remuneration for all other Executive KMP members.
Executive KMP members have five years to build up their
securityholding to the suggested level. As at 30 June 2015,
progress towards the minimum securityholding guidelines for
each continuing Executive KMP member was as follows:
Value of
security- Minimum
security-
holding
guideline
$
holding as
Date at 30 June
2015
$
securityholding
to be attained
Executive
KMP member
Susan Lloyd-Hurwitz November 2017
July 2017
Andrew Butler
July 2019
John Carfi
July 2017
Brett Draffen
December 2018
Shane Gannon
July 2019
Susan MacDonald
July 2019
David Rolls
100,744
86,288
345,678
1,620,961
—
211,638
—
1,500,000
350,000
350,000
475,000
450,000
350,000
350,000
10 How remuneration is structured
Our executive remuneration is focused on execution
of business strategy. We provide market-competitive
remuneration and reward for performance that delivers
strategic outcomes.
a) Fixed remuneration: how does it work?
Fixed remuneration acts as a base-level reward for a
competent level of performance. It includes cash, compulsory
superannuation and any salary-sacrificed items (including FBT).
The following factors are taken into account when setting fixed
remuneration levels at Mirvac:
— the size and complexity of the role;
— role accountabilities;
— skills and experience of the individual; and
— market pay levels for comparable roles.
The opportunity value for the at-risk components of remuneration
is determined by reference to fixed remuneration, so Mirvac
is conscious that any adjustments to fixed remuneration have
a flow-on impact on potential STI and LTI awards.
Remuneration report / continued
Expert input from management and external advisors
The HRC has appointed Ernst & Young as its external
remuneration advisor. Ernst & Young provides both information
on current market practice and independent input into key
remuneration decisions.
Ernst & Young’s terms of engagement include specific measures
designed to protect its independence. To effectively perform
its role, Ernst & Young needs to interact with members of
Mirvac management, particularly those in the Human Resources
team. However, to ensure independence, members of Mirvac’s
management are precluded from requesting services that would
be considered to be a ‘remuneration recommendation’ as defined
by the Corporations Amendment (Improving Accountability
on Director and Executive Remuneration) Act 2011.
During the year ended 30 June 2015, Ernst & Young provided
the HRC with:
— guidance in the review and design of executive remuneration
strategy;
— assistance in drafting of remuneration disclosures;
— relative TSR performance calculations; and
— market remuneration information which was used as an
input to the annual review of the KMP and other selected
Executives’ remuneration.
No remuneration recommendations were provided by
Ernst & Young or any other advisor during the year.
b) Market positioning
Mirvac has adopted a market positioning strategy designed to
attract and retain talented employees, and to reward them for
delivering strong performance. The market positioning strategy
also supports fair and equitable outcomes between employees.
Definition of market
When determining the relevant market for each role, Mirvac
considers the companies from which it sources talent, and to
whom it could potentially lose talent.
For business roles:
— the primary comparison group is the Australian Real Estate
Investment Trust (“A-REIT”) sector, plus Lend Lease and
Aveo Group; and
— the secondary comparison group is a general industry
comparison group with a similar market capitalisation
(50-200 per cent of Mirvac’s 12 month average
market capitalisation).
For corporate roles:
— the primary comparison group is a general industry
comparison group with a similar market capitalisation
(50-200 per cent of Mirvac’s 12 month average market
capitalisation) to reflect the greater transferability of skills.
Where disclosed data is unavailable, Mirvac relies on published
remuneration surveys covering relevant industries and the
broader market.
20
MIRVAC GROUP ANNUAL REPORT 2015Directors’ report
Remuneration report / continued
b) STI: how does it work?
Purpose
Eligibility
Pool
Awards
Performance measures
Motivate and reward employees for contributing to the delivery of annual business performance.
All permanent Mirvac employees employed on the award date are eligible to participate in the STI plan.
Group operating earnings must be at least 90 per cent of target before any STI payments are made.
The size of the STI pool is then determined based on Group performance against a balanced
scorecard of measures linked to Mirvac’s strategic drivers.
A target opportunity is set for each individual, which will be earned if Group and individual performance
is on target. Actual STI awards can range from zero to double the target opportunity, depending on
Group and individual performance, but is capped at a maximum of 200 per cent of target.
Performance is assessed against both Group and individual performance. Individual performance
measures are set based on the specific responsibilities of each role. There are three Group
performance measures: two financial measures (with a combined weighting of 70 per cent) and a
scorecard of non-financial measures (with a combined weighting of 30 per cent), they are as follows:
Category
Financial
Measure
Rationale for using
Operating earnings
ROIC
Reflects the underlying performance of Mirvac’s
core business operations and represents a key
driver of securityholder value.
Reflects how efficiently Mirvac is using its assets
to generate earnings.
Non-financial
Customer and investor
satisfaction
Represents how well Mirvac is meeting the
expectations of key external stakeholders.
High performing people
and culture
There is a strong correlation between high
levels of employee engagement and total
securityholder return.
HSE&S leadership
Mirvac is committed to providing a safe workplace
for all of its employees and to ensuring its activities
do not have an adverse impact on the environment.
The targets for the non-financial individual measures are not disclosed as some are commercially
sensitive. The measures are quantitative in nature and recurring targets will typically increase each year.
Performance schedule
For each performance measure on the Group STI
scorecard, a threshold, plan and stretch goal is
set at the start of the financial year.
The Group STI score for each performance level
is calculated according to the following schedule:
Performance level
Group STI score % target
Continue reading text version or see original annual report in PDF format above