Rangatira Annual Report 2023 - Flipbook - Page 76
76
R anga tira Annua l Rep or t 2 0 2 3
Rangatira Group
Notes to the Consolidated
Financial Statements (continued)
For the year ended 31 March 2023
Note 28 Share Based Payments
A Long-term incentive plan (LTIP) was put in place for the three-year period between April 2022 (FY23) to March 2025 (FY25) for
invited employees.
This gives participants the rights to A shares upon meeting or exceeding set three-year performance Total Shareholder return (TSR)
hurdles. Each employee can earn an amount equal to a set percentage of their base salary in the case these hurdles are met. The
hurdles are:
3 Year Average TSR
Percentage of Rights to Vest
Below 8%
Nil
Between 8% and 10%
Between 20% and 60%
Between 10% and 12%
Between 60% and 100%
Between 12% and 15%
Between 100% and 150%
Over 15%
150%
The TSR is calculated using the year-on-year change in directors’ valuation and dividends paid, as a percentage of the opening
directors’ valuation.
For the initial allocation for the years FY23, FY24 and FY25 the amount earned through the LTI will be converted into A shares using a
price of $14.25 per share. This was consistent with the capital raise process completed in August 2022. It represented 86.8% of the
latest director’s valuation at the time of the capital raise – June 2022 the Directors NAV was $16.41 per share.
It is anticipated that each year another allocation would be made for the next three-year period.
To the extent that the performance and service conditions are not met, the share rights are forfeited unless otherwise agreed by the
parent company’s Board.
The LTIP contains a net of tax settlement feature where Rangatira Limited will withhold a number of shares, equal to the value of the
employees’ tax obligations. The employee will be issued shares net of their tax obligation, and the Company will settle the employee’s
tax obligation through PAYE payment, directly to Inland Revenue on the employee’s behalf. Accordingly:
• The award of shares to the employee net of their tax obligations is classified as an equity-settled share-based payment
transaction, with non-market performance conditions and a service condition; and
• The amount Rangatira Limited expects to pay Inland Revenue to settle the employees’ tax obligation in relation to the LTIP is
classified as a cash-settled share-based payment transaction.
Equity-settled portion of the LTIP
The following table summarises the movements in the reserve related to progress toward the vesting of share rights in the Group’s
share based payment reserve:
2023
2022
$000
$000
Opening balance
Progress toward share rights (expense recognised through profit or loss)
Share rights forfeited during the year (transferred to retained earnings)
Share based payment reserve closing balance
-
-
98
-
-
-
98
-