UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
OR
For the fiscal year ended 31 March 2024
OR
OR
Date of event requiring this shell company report
For the transition period from to
Commission file number 1-15240
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Company Secretary
(Contact name)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol: | Name of each exchange on which registered: | ||||||
| Common stock, represented by CHESS Units of Foreign Securities | JHX | New York Stock Exchange* | ||||||
| CHESS Units of Foreign Securities | JHX | New York Stock Exchange* | ||||||
* Listed, not for trading, but only in connection with the registered American Depositary Shares, pursuant to the requirements of the U.S. Securities and Exchange Commission | ||||||||
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report: 433,784,634 shares of common stock at 31 March 2024
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No
Note — Checking the box will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Emerging growth company | ||||||||||||||||||
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after 5 April 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
| ☒ | International Financial Reporting Standards as issued by the International Accounting Standards Board | ☐ | Other | ☐ | |||||||||||||
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: ☐ Item 17 ☐ Item 18
If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
2024
ANNUAL REPORT
ON FORM 20-F
TABLE OF CONTENTS
| Page(s) | |||||
FORM 20-F CROSS REFERENCE
| Page(s) | |||||
| PART 1 | |||||
| Item 1. Identity of Directors, Senior Management and Advisers | Not applicable | ||||
| Item 2. Offer Statistics and Expected Timetable | Not applicable | ||||
| Item 3. Key Information | |||||
| A. [Reserved] | Not applicable | ||||
| B. Capitalization and Indebtedness | Not applicable | ||||
| C. Reasons for the Offer and Use of Proceeds | Not applicable | ||||
| D. Risk Factors | 149-159 | ||||
| Item 4. Information on the Company | |||||
| A. History and Development of the Company | 2-3; 12-13; 180 | ||||
| B. Business Overview | 3-9 | ||||
| C. Organizational Structure | 3; 10 | ||||
| D. Property, Plants and Equipment | 11-13; 106-107 | ||||
Item 4A. Unresolved Staff Comments | None | ||||
| Item 5. Operating and Financial Review and Prospects | |||||
| A. Operating Results | 99-105 | ||||
| B. Liquidity and Capital Resources | 105-107 | ||||
| C. Research and Development, Patents and Licenses, etc. | 8 | ||||
| D. Trend Information | 107 | ||||
| E. Critical Accounting Estimates | 96-99 | ||||
| Item 6. Directors, Senior Management and Employees | |||||
| A. Directors and Senior Management | 14-29 | ||||
| B. Compensation | 30-68 | ||||
| C. Board Practices | 22-29; 69-93 | ||||
| D. Employees | 165 | ||||
| E. Share Ownership | 57-60; 64-68 | ||||
| F. Disclosure of a Registrant’s action to Recover Erroneously Awarded Compensation | None | ||||
| Item 7. Major Shareholders and Related Party Transactions | |||||
| A. Major Shareholders | 181-182 | ||||
| B. Related Party Transactions | 130 | ||||
| C. Interests of Experts and Counsel | Not Applicable | ||||
| Item 8. Financial Information | |||||
| A. Consolidated Statements and Other Financial Information | 108-147; 179 | ||||
| B. Significant Changes | None | ||||
| Item 9. The Offer and Listing | |||||
| A. Offer and Listing Details | 165-167 | ||||
| B. Plan of Distribution | Not Applicable | ||||
| C. Markets | 165-166 | ||||
| D. Selling Shareholders | Not Applicable | ||||
| E. Dilution | Not Applicable | ||||
| F. Expenses of the Issue | Not Applicable | ||||
| PART 1 (continued) | Page(s) | ||||
| Item 10. Additional Information | |||||
| A. Share Capital | Not Applicable | ||||
| B. Memorandum and Articles of Association | 179 | ||||
| C. Material Contracts | 179 | ||||
| D. Exchange Controls | 179 | ||||
| E. Taxation | 169-176 | ||||
| F. Dividends and Paying Agents | Not Applicable | ||||
| G. Statement by Experts | Not Applicable | ||||
| H. Documents on Display | 180 | ||||
| I. Subsidiary Information | Not Applicable | ||||
| J. Annual Report to Security Holders | 180 | ||||
| Item 11. Quantitative and Qualitative Disclosures About Market Risk | 177-178 | ||||
| Item 12. Description of Securities Other Than Equity Securities | |||||
| A. Debt Securities | Not Applicable | ||||
| B. Warrants and Rights | Not Applicable | ||||
| C. Other Securities | Not Applicable | ||||
| D. American Depositary Shares | 166-167 | ||||
| PART II | |||||
Item 13. Defaults, Dividend Arrearages and Delinquencies | None | ||||
| Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds | None | ||||
| Item 15. Controls and Procedures | 161-162 | ||||
| Item 16. [Reserved] | Not Applicable | ||||
| Item 16A. Audit Committee Financial Expert | 88 | ||||
| Item 16B. Code of Ethics | 85-87 | ||||
| Item 16C. Principal Accountant Fees and Services | 148 | ||||
Item 16D. Exemptions from the Listing Standards for Audit Committees | None | ||||
| Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 168 | ||||
| Item 16F. Change in Registrant’s Certifying Accountant | None | ||||
| Item 16G. Corporate Governance | 69-93 | ||||
| Item 16H. Mine Safety Disclosure | 12 | ||||
| Item 16I. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections | Not Applicable | ||||
| Item 16J. Insider Trading Policies | 86-87 | ||||
| Item 16K. Cybersecurity | 163-164 | ||||
| PART III | |||||
| Item 17. Financial Statements | Not Applicable | ||||
| Item 18. Financial Statements | 108-147 | ||||
| Item 19. Exhibits | 189-193 | ||||
SECTION 1
INTRODUCTION
James Hardie Industries plc is a world leader in the manufacturing of fiber cement building solutions, and a market leader in Europe for fiber gypsum products. Our current primary geographic markets include the United States of America (“US,” “USA” or the “United States”), Australia, Europe, New Zealand and the Philippines.
James Hardie Industries plc is a “public limited company,” incorporated and existing under the laws of Ireland. Except as the context otherwise may require, references in this Annual Report on Form 20-F (this “Annual Report”) to “James Hardie,” the “James Hardie Group,” the “Company,” “JHI plc,” “we,” “our” or “us” refer to James Hardie Industries plc, together with its direct and indirect wholly owned subsidiaries as of the time relevant to the applicable reference.
For certain information about the basis of preparing the financial information in this Annual Report as well as an explanation of forward-looking statements and the risks, uncertainties and assumptions to which they are subject, see “Section 2 – Reading this Report.” Further, a “Glossary of Abbreviations and Definitions” has also been included under Section 4 of this Annual Report.
The term “fiscal year” refers to our fiscal year ended 31 March of such year; the term “dollars,” “US$” or “$” refers to US dollars; the term “AUD” or “A$” refers to Australian dollars; and the term “EUR” or “€” refers to Euros.
Information contained in or accessible through the websites mentioned in this Annual Report does not form a part of this Annual Report unless we specifically state that it is incorporated by reference herein. All references in this Annual Report to websites are inactive textual references and are for information only.
INFORMATION ON THE COMPANY
History and Development of the Company
About James Hardie
James Hardie Industries plc is incorporated and existing under the laws of Ireland. As an Irish plc, we are governed by the Irish Companies Act 2014 and we operate under the regulatory requirements of numerous jurisdictions and organizations, including the Australian Securities Exchange (“ASX”), Australian Securities and Investments Commission (“ASIC”), the New York Stock Exchange (“NYSE”), the United States Securities and Exchange Commission (“SEC”), the Irish Takeover Panel and various other rulemaking bodies.
The address of our registered office in Ireland is 1st Floor, Block A, One Park Place, Upper Hatch Street, Dublin 2, D02 FD79, Ireland. The telephone number is +353 1411 6924. Our corporate website is www.jameshardie.com. Our agent in the United States is CT Corporation. Its office is located at 28 Liberty Street - 42nd Floor, New York, New York 10005. The address of our registered office in Australia is Level 17, 60 Castlereagh Street, Sydney NSW 2000 and the telephone number is +61 13 11 03. Our share registry is maintained by Computershare Investor Services Pty Ltd. All inquiries and correspondence regarding holdings should be directed to: Computershare Investor Services Pty Ltd, GPO Box 2975, Melbourne, VIC 3001; telephone: +61 3 9415 4000 or toll free within Australia: 1300 855 080. Our American Depositary Receipt (“ADR”) register is maintained by Deutsche Bank. All inquiries and correspondence regarding American Depositary Shares (“ADSs”) should be directed to Deutsche Bank, 1 Columbus Circle Floor 17S, New York, New York 10019, United States; telephone 1-212-250-9100.
Our History
James Hardie was established in 1888 as an import business, listing on the ASX in 1951 to become a publicly owned company in Australia. After becoming a listed company, we built a diverse portfolio of building and industrial products. In the late-1970s, we pioneered the development of asbestos-free fiber cement technology and in the early-1980’s began designing and manufacturing a wide range of fiber cement building products that made use of the benefit that came from the products’ durability, versatility and strength. Using the technical and manufacturing expertise developed in Australia, we expanded into the United States, opening our first fiber cement plant in Fontana, California in February 1990. Since then, we have expanded our product portfolio and global footprint, with fiber cement manufacturing plants across the United States, Australia and the Philippines. In April 2018, we completed the acquisition of Fermacell, a market leader in fiber gypsum and cement-bonded boards, which has plants in Germany, the Netherlands and Spain.
Our Agreement with Asbestos Injuries Compensation Fund
Prior to 1987, ABN 60 Pty Limited (formerly James Hardie Industries Limited, then the ultimate parent company of the James Hardie Group) (“ABN 60”) and two of its former subsidiaries, Amaca Pty Limited (“Amaca”) and Amaba Pty Limited (“Amaba”) (collectively, the “Former James Hardie Companies”), manufactured products in Australia that contained asbestos. The manufacture and sale of these products has resulted in liabilities for the Former James Hardie Companies in Australia.
In February 2007, our shareholders approved the Amended and Restated Final Funding Agreement (“AFFA”) entered into on 21 November 2006 to provide long-term funding to Asbestos Injuries Compensation Fund (“AICF”) for the compensation of proven Australian-related personal injuries for which the Former James Hardie Companies are found liable. AICF, an independent trust, subsequently assumed ownership of the Former James Hardie Companies. We do not own AICF, however, we are
entitled to appoint three directors, including the Chairman, and the New South Wales (“NSW”) Government is entitled to appoint two directors.
Under the terms of the AFFA, James Hardie 117 Pty Ltd (the “Performing Subsidiary”) will make annual payments to AICF. The amount of these annual payments is dependent on several factors, including our free cash flow (as defined in the AFFA), actuarial estimations, actual claims paid, operating expenses of AICF, changes in the AUD/USD exchange rate and the annual cash flow cap. JHI plc owns 100% of the Performing Subsidiary and guarantees the Performing Subsidiary’s obligation. As a result, for US GAAP purposes, we consider JHI plc to be the primary beneficiary of AICF.
Although we have no legal ownership in AICF, for financial reporting purposes, our interest in AICF is considered variable and we consolidate AICF due to our pecuniary and contractual interests in AICF as a result of the funding arrangements outlined in the AFFA. For additional information on our consolidation of AICF and asbestos-related assets and liabilities, see Note 1 to our consolidated financial statements in Section 2.
Corporate Structure
The following diagram summarizes our corporate structure at 31 March 2024:
Business Overview
General Overview of Our Business
James Hardie Industries plc is the world’s #1 producer and marketer of high-performance fiber cement and fiber gypsum building solutions. We market our fiber cement products and systems under the HardieTM brand, such as Hardie® Plank, Hardie® Panel, Hardie® Trim, Hardie® Backer, Hardie® Artisan Siding, HardieTM Architectural Collection, and other brand names such as Cemboard®, Prevail®, Scyon®, Linea® and Hardie™ Oblique™ cladding. We are also a market leader in the European premium timber frame and dry lining business, especially in Germany, Switzerland and Denmark. We market our fiber gypsum and cement-bonded boards under the fermacell® brand and our fire-protection boards under the AESTUVER® brand.
The Company has three operating segments: North America Fiber Cement, Asia Pacific Fiber Cement and Europe Building Products. See Notes 2 and 18 to our consolidated financial statements in Section 2 for a description of our operating segments and a breakdown of our net sales by operating segment and geographic market for each of our last three fiscal years.
Products
We manufacture fiber cement, fiber gypsum and cement bonded boards. Our fiber cement building materials includes a wide-range of products for both external and internal use across a broad range of applications, including external applications: siding, cladding, trim, soffit; and internal applications: walls, floors, ceilings. While there are some market specific products, our core fiber cement products, planks and flat panels, are sold across all of the markets in which we operate. Our fiber gypsum and cement-bonded boards are used mainly for interior applications such as dry lining walls, walls in timber frame buildings and flooring solutions. In addition, our cement-bonded boards are used in exterior and industrial applications as well as for fire protection.
Products Used in External Applications
We developed a proprietary technology platform that enables us to produce thicker yet lighter-weight fiber cement products that are generally easier to handle than most traditional building products. Further, we believe that our fiber cement products provide certain durability and performance advantages leading to improved maintenance, while offering comparable aesthetics to competing products, such as wood and stucco, and superior aesthetics when compared to vinyl siding.
Performance and design advantages:
•Our fiber cement products exhibit resistance to the damaging effects of moisture, fire, impact and termites compared to natural and engineered wood and wood-based products;
•Competing products do not duplicate fiber cement aesthetics;
•Our fiber cement products provide the ability to imprint designs that closely resemble the patterns and profiles of traditional building materials such as wood and stucco;
•The surface properties of our products provide an effective paint-holding finish, especially when compared to natural and engineered wood products, allowing for greater periods of time between necessary maintenance and repainting; and
•Compared to masonry construction, fiber cement is lightweight, physically flexible and can be cut using readily available tools, making our products more appealing across a broad range of architectural styles, be it of timber or steel-framed construction.
The benefits associated with our fiber cement products have enabled us to gain a competitive advantage over competing products.
Products Used in Internal Applications
Compared to natural and engineered wood and wood-based products, we believe our product range for internal applications provide the same general advantages provided by our products for external applications. In addition, our fiber cement products for internal applications exhibit less movement in response to exposure to moisture and impact damage than many competing products, providing a more consistent and durable substrate on which to install tiles. Further, we believe our ceramic tile underlayment products exhibit better handling and installation characteristics compared to fiberglass mesh cement boards. We believe our fiber gypsum products offer superior stability, fire safety and sound insulation properties compared to engineered wood and gypsum plaster boards. Furthermore, we believe our fiber gypsum flooring solutions offer superior handling properties, especially in the modernization of existing buildings, compared to wet screed solutions.
Significant New Products
In North America, new products released over the last three years include, an expanded ColorPlus® Technology offering through the Magnolia Home | James Hardie Collection and the HardieTM Architectural Collection.
In Asia Pacific, new products released over the past three years include Hardie™ Brushed Concrete Cladding to support our continued growth of our Hardie Embedded Texture Panel products and Hardie™ Oblique™ Cladding launched in Australia. In the Philippines, we debuted a product built specifically for Filipino homes and climate: HardieFlex® NexGen™ fiber cement boards with MoldBlock™ Technology.
In Europe, new products released over the past three years include HardieTM VL Plank, as well as the HardieTM Architectural Collection (which includes designs such as brushed concrete, smooth sand and the recently launched metallic) and fermacell® Therm25TM dry screed elements and the new pumpable levelling compound which helps to speed up and simplify the flooring renovation processes.
Principal Markets for Our Products
Fiber Cement
In the US and Canada, the largest application for fiber cement building products is in external siding for the residential building industry.
Competition in this market comes primarily from substitute products, such as natural wood or engineered wood, vinyl, stucco and brick. We believe we can continue to increase our market share from these competing products through targeted marketing programs designed to educate distributors, builders, contractors, installers and homeowners on our brand and the performance, design and cost advantages of our products.
In the Asia Pacific region, we principally sell into the Australian, New Zealand and Philippines markets, with the residential building industry representing the principal market for fiber cement products. The largest applications of fiber cement across our three primary markets are in external applications: siding, cladding, trim, soffit; and internal applications: walls, floors, ceilings.
In Australia, competition from imports and the locally based fiber cement manufacturer continues to be strong. Additionally, we have competition from natural and engineered wood, wallboard, masonry and brick products. In New Zealand and the Philippines, competitor fiber cement imports continue as manufacturers look to supplement their primary operating environments with additional markets.
In Europe, our fiber cement building products are used in both residential and commercial building applications in the form of external siding, soffits and internal tile underlayment for walls and floors. Competition includes timber based products as well as other manufacturers of fiber cement.
Fiber Gypsum and Cement-Bonded Boards
Our European fermacell® brand products are sold into the residential repair and remodel, commercial and residential new construction markets. The fermacell® brand of products comprise fiber gypsum and cement-bonded boards, two complementary products in the high performance board space, mainly used in timber frame construction, commercial dry lining projects and repair and remodel. Cement bonded boards are also used for several fire protection projects including tunnels.
Our key markets for fermacell® brand products in Europe include Germany, Switzerland, UK, Denmark, France, Belgium, Netherlands and Luxembourg, where we sell our products to residential and commercial new-build as well as to repair and remodel. In addition, our fire protection AESTUVER® boards are sold to projects worldwide.
Seasonality
We do not have significant seasonality, however our businesses typically follow activity levels in the building and construction industry.
Raw Materials
The principal raw materials used in the manufacture of our fiber cement products are cellulose fiber (wood-based pulp), silica (sand), Portland cement and water. The key raw materials used in the manufacture of our fiber gypsum products are gypsum, recycled paper and water. We have established supplier relationships for all of our raw materials across the various markets in which we operate, and we have supply agreements and plans in place to navigate challenges in the supply environment. The purchase price of these raw materials and other materials can fluctuate depending on the supply-demand situation at any given point in time.
We work hard to reduce the effect of both price fluctuations and supply interruptions by entering into contracts with qualified suppliers and through continuous internal improvements in both our products and manufacturing processes.
Cellulose Fiber
Reliable access to specialized and consistent quality pulp is critical to the production of fiber cement building materials. As a result of our many years of experience and expertise in the industry, we share our internal expertise with pulp producers in New Zealand, the United States, Canada and Chile to ensure they are able to provide us with a highly specialized and proprietary formula crucial to the reinforcing cement matrix of our fiber cement products. We have confidentiality agreements with our pulp producers, and we have obtained patents in the United States and in certain other countries covering certain unique aspects of our pulping formulas and processes that we believe cannot adequately be protected through confidentiality agreements. However, we cannot be assured that our intellectual property and other proprietary information will be protected in all cases. See “Section 3 – Risk Factors.”
Silica
High purity silica is sourced locally by the various production plants. In the majority of locations, we use silica sand as a silica source. In certain other locations, however, we process quartz rock and beneficiate silica sand to ensure the quality and consistency of this key raw material.
Cement
Cement is acquired in bulk from local suppliers.
Water
We primarily use local water supplies and process all wastewater to comply with environmental requirements.
Gypsum
The primary types of gypsum used in the production of our fiber gypsum products are natural and synthetic gypsum. Natural gypsum is extracted in Germany and Spain and processed in Germany, the Netherlands and Spain. Synthetic gypsum is obtained from power plants in Germany and Poland. While synthetic gypsum will be phased out due to the coal power plant phase-out in the European Union, we are well positioned for the future with natural gypsum sources.
Recycled Paper
Recycled paper, utilized in the production of our fiber gypsum products in Europe, is generally sourced locally by the various production plants in Europe.
Sales, Marketing and Distribution
Our brand names, customer education in comparative product advantages, differentiated product range and customer service, including technical advice and assistance, provide the basis for our marketing strategy. The Company leverages a global integrated marketing campaign that seeks to empower homeowners to realize their dream home, while also marketing directly to the building trades to drive demand for our products.
We offer our customers support through a specialized sales force and customer service infrastructure in North America, Australia, New Zealand, the Philippines and Europe.
Our customer service infrastructure includes inbound customer service support coordinated nationally in each country, and is complemented by outbound telemarketing capability. Within each regional market, we provide sales and marketing support to building products dealers and lumber yards and also provide support directly to the customers of these distribution channels, principally homebuilders and building contractors.
We maintain dedicated regional sales management teams in our major sales territories who maintain relationships with national and other major accounts. Our various sales forces, which in some instances manage specific product categories, include skilled trades people who provide on-site technical advice and assistance.
In North America, we sell our exterior fiber cement products for repair and remodel and new residential construction through a combination of distributors, dealers and lumber yards. Where sales are to distributors, they then sell these products to dealers or lumber yards. Our interior fiber cement products in North America are typically sold through the large home center retailers and specialist distributors or dealers. Our products are distributed across North America primarily by road and, to a lesser extent, by rail.
In Australia and New Zealand, both new construction and repair and remodel products are sold through a combination of distributors, dealers and lumber yards. In the Philippines, a network of thousands of small to medium size retail outlets sell our fiber cement products to consumers, builders and real estate developers and DIY type stores. The physical distribution of our product in each country is primarily by road, rail or sea transport.
In Europe, both new construction and repair and remodel products are primarily sold to builder’s merchants and DIY type stores. These customers then sell the products to applicators such as dry liners, timber frame companies, smaller applicators and end consumers. Our products are distributed across Europe primarily by road and rail and, to a lesser extent, by sea transport.
Despite the fact that distributors and dealers are generally our direct customers, we also aim to increase primary demand for our products by marketing our products directly to homeowners, architects and builders and building contractors. We encourage them to specify and install our products because of the quality and craftsmanship of our products.
Geographic expansion of our fiber cement business has occurred in markets where framed construction is prevalent for residential applications or where there are opportunities to change building practices from masonry to framed construction. Expansion is also possible where there are direct substitution opportunities irrespective of the methods of construction. With the exception of our current major markets, as well as Japan and certain rural areas in Asia, and Eastern Europe, most markets in the world principally utilize masonry construction for external walls in residential construction. Accordingly, further geographic expansion depends substantially on our ability to provide alternative construction solutions and for those solutions to be accepted in those markets.
Dependence on Trade Secrets and Research and Development (“R&D”)
We pioneered the successful development of cellulose reinforced fiber cement and, since the early-1980s, have progressively introduced products developed as a result of our proprietary product formulation and process technology. The introduction of differentiated products is one of the core components of our global business strategy. This product differentiation strategy is supported by our significant investment in R&D activities.
We view spending on R&D as the key to sustaining our existing product leadership position, by providing a continuous pipeline of innovative new products and technologies with sustainable performance and unique design advantages over our competitors. Further, through our investments in new process technology or by modifying existing process technology, we aim to keep reducing our capital and operating costs and to find new ways to make existing and new products. As such, we expect to continue allocating significant funding to these endeavors.
Our current patent portfolio is based mainly on fiber cement compositions, associated manufacturing processes and the resulting products. Our non-patented technical intellectual property consists primarily of our operating and manufacturing know-how and raw material and operating equipment specifications, all of which are maintained as trade secret information. We have enhanced our abilities to effectively create, manage and utilize our intellectual property and have implemented a strategy that increasingly uses patenting and trade secret protection to protect and increase our competitive advantage.
In addition, we have a variety of industrial, commercial and financial contracts relating to our proprietary manufacturing processes. While we are dependent on the competitive advantage that these items provide as a whole, we are not dependent on any one of them individually and do not consider any one of them individually to be material. We do not materially rely on intellectual property licensed from any outside third parties. However, we cannot assure that our intellectual property and other proprietary information will be protected in all cases. In addition, if our R&D efforts fail to generate new, innovative products or processes, our overall profit margins may decrease and demand for our products may fall. See “Section 3 – Risk Factors.”
Governmental Regulation
As an Irish plc, we are governed by the Irish Companies Act 2014 and are also subject to all applicable European Union level legislation. We also operate under the regulatory requirements of numerous jurisdictions and organizations, including the ASX, ASIC, the NYSE, the SEC, the Irish Takeover Panel and various other federal, state, local and foreign rulemaking bodies. See “Section 3 – Other Information – Constitution” for additional information regarding the Irish Companies Act 2014 and regulations to which we are subject.
Environmental, Health and Safety Regulation
Our operations and properties are subject to extensive federal, state, local and foreign environmental protection, health and safety laws, regulations and ordinances governing activities and operations that may have adverse environmental effects. As it relates to our operations, regulated material, including wastewater and air emissions, may be produced at some of our manufacturing plants. The wastewater produced from our manufacturing plants is internally recycled and reused before eventually being discharged to publicly owned treatment works, a process which is monitored by us, as well as by regulators. In addition, we actively monitor air emissions and other regulated materials produced by our plants so as to ensure compliance with the various environmental regulations under which we operate.
Some environmental laws provide that a current or previous owner or operator of real property may be liable for the costs of investigation, removal or remediation of certain regulated materials on, under, or in that property or other impacted properties. In addition, persons who arrange, or are deemed to have arranged, for the disposal or treatment of certain regulated materials may also be liable for the costs of investigation, removal or remediation of the regulated materials at the disposal or treatment site, regardless of whether the affected site is owned or operated by such person. Environmental laws often impose liability whether or not the owner, operator, transporter or arranger knew of, or was responsible for, the presence of such regulated materials. Also, third parties may make claims against owners or operators of properties for personal injuries, property damage and/or for clean-up associated with releases of certain regulated materials pursuant to applicable environmental laws and common law tort theories, including strict liability.
In the past, we have received notices of alleged discharges in excess of our water and air permit limits. In each case, and in compliance with our Environmental Policy, we have addressed the concerns raised in those notices, in part, through enhanced administrative controls and/or capital expenditures intended to prevent future discharges in excess of permitted levels and, on occasion, the payment of minor associated fines.
Environmental compliance costs in the future will depend, in part, on continued oversight of operations, expansion of operations and manufacturing activities, regulatory developments and future requirements that cannot presently be predicted.
Organizational Structure
JHI plc is incorporated and domiciled in Ireland and the table below sets forth our significant subsidiaries, all of which are wholly-owned by JHI plc, either directly or indirectly, as of 30 April 2024.
| Name of Company | Jurisdiction of Establishment | Jurisdiction of Tax Residence | ||||||||||||
| James Hardie 117 Pty Ltd | Australia | Australia | ||||||||||||
| James Hardie Australia Pty Ltd | Australia | Australia | ||||||||||||
| James Hardie Building Products Inc. | United States | United States | ||||||||||||
| James Hardie Europe GmbH | Germany | Germany | ||||||||||||
| James Hardie Europe Holdings GmbH | Germany | Germany | ||||||||||||
| James Hardie Holdings Limited | Ireland | Ireland | ||||||||||||
| James Hardie International Finance Designated Activity Company | Ireland | Ireland | ||||||||||||
| James Hardie International Group Limited | Ireland | Ireland | ||||||||||||
| James Hardie International Holdings Limited | Ireland | Ireland | ||||||||||||
| James Hardie NL1 B.V. | Netherlands | Netherlands | ||||||||||||
| James Hardie NL2 B.V. | Netherlands | Netherlands | ||||||||||||
| James Hardie North America, Inc | United States | United States | ||||||||||||
| James Hardie Technology Holdings 1 Limited | Ireland | Ireland | ||||||||||||
| James Hardie Technology Holdings 2 Limited | Ireland | Ireland | ||||||||||||
| James Hardie Technology Limited | Bermuda | Ireland | ||||||||||||
| James Hardie U.S. Investments Sierra Inc. | United States | United States | ||||||||||||
| RCI Holdings Pty Ltd | Australia | Australia | ||||||||||||
Property, Plants and Equipment
We have manufacturing plants across the United States, Europe, Australia and the Philippines, with our plants servicing both domestic and export markets. Our plants are ideally located to take advantage of established transportation networks, allowing us to distribute our products into key markets, while also providing easy access to key raw materials.
Manufacturing Capacity
We own all the manufacturing facilities listed below.
| Plant Location | 31 March 2024 Nameplate Capacity (mmsf)1 | Planned Future Nameplate Capacity (mmsf)1 | ||||||||||||
| United States fiber cement | ||||||||||||||
| Cleburne, Texas | 666 | 666 | ||||||||||||
| Peru, Illinois | 560 | 560 | ||||||||||||
| Plant City, Florida | 600 | 600 | ||||||||||||
| Pulaski, Virginia | 600 | 600 | ||||||||||||
| Reno, Nevada | 300 | 300 | ||||||||||||
| Tacoma, Washington | 500 | 500 | ||||||||||||
| Waxahachie, Texas | 413 | 413 | ||||||||||||
| Fontana, California | 250 | 250 | ||||||||||||
| Summerville, South Carolina | 190 | 190 | ||||||||||||
| Prattville, Alabama | 600 | 1,200 | ||||||||||||
Westfield, Massachusetts2 | N/A | N/A | ||||||||||||
| Greenfield - Crystal City, Missouri | — | 600 | ||||||||||||
| Total United States fiber cement | 4,679 | 5,879 | ||||||||||||
| Asia Pacific fiber cement | ||||||||||||||
| Rosehill, New South Wales, Australia | 180 | 180 | ||||||||||||
| Carole Park, Queensland, Australia | 317 | 317 | ||||||||||||
Cabuyao City, Philippines | 172 | 172 | ||||||||||||
| Total Asia Pacific fiber cement | 669 | 669 | ||||||||||||
| Europe fiber gypsum | ||||||||||||||
| Münchehof, Germany | 441 | 441 | ||||||||||||
| Orejo, Spain | 275 | 527 | ||||||||||||
| Wijchen, the Netherlands | 273 | 273 | ||||||||||||
| Siglingen, Germany | 154 | 154 | ||||||||||||
| Total Europe fiber gypsum | 1,143 | 1,395 | ||||||||||||
| Total Europe fiber cement greenfield plant | — | 300 | ||||||||||||
| Europe Other | ||||||||||||||
Calbe, Germany 3 | 41 | 41 | ||||||||||||
Schraplau, Germany 2 | N/A | N/A | ||||||||||||
____________
1The calculated annual nameplate capacity is based on management’s historical experience with our production process and is calculated assuming continuous operation, 24 hours per day, seven days per week, producing 5/16” medium density product at a targeted operating speed. No accepted industry standard exists for the calculation of our fiber cement, fiber gypsum and cement bonded board manufacturing facility nameplate, design and utilization capacities.
2Our Westfield, Massachusetts plant is a finishing facility for fiber cement substrate made at other locations. Our Schraplau, Germany facility is a raw materials processing facility for our fiber gypsum plants. As a result, no annual nameplate capacity is available for either of these facilities.
3Our Calbe, Germany plant produces cement bonded boards.
For fiscal year 2024, actual capacity utilization across our fiber cement and fiber gypsum plants was an average of 85%, 68% and 88% in the United States, Europe and Asia Pacific, respectively. For fiscal year 2023, actual capacity utilization across our fiber cement and fiber gypsum plants was an average of 89%, 81% and 95% in the United States, Europe and Asia Pacific, respectively.
Mines
In North America, we lease a silica quartz mine site near our Tacoma, Washington facility that is being actively mined. We have contracted with a third-party mining company to perform the mining operations at that site, including providing the labor and equipment for the mining work. The lease for our quartz mine in Washington expires in February 2027, with additional options to renew. We also lease a silica quartz mine site in Nevada, maintain leases on various properties in Texas that would permit us to mine silica quartz and own property in California which could be mined for silica. As of 30 April 2024, other than the site in Washington, we are not mining at the Nevada, Texas or California sites and have no immediate plans to do so.
As a mine operator in the US, we are required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), and rules promulgated by the SEC implementing that section of the Dodd-Frank Act, to provide certain information concerning mine safety violations and other regulatory matters concerning the operation of our mines. During fiscal year 2024, we did not receive any notices, citations, orders, legal action or other communication from the US Department of Labor’s Mine Safety and Health Administration that would necessitate additional disclosure under Section 1503(a) of the Dodd-Frank Act. Similarly, we have not experienced any mining-related fatalities in our mining operations. There are currently no pending legal actions before the Federal Mine Safety and Health Review Commission related to our mining operations.
In Europe, we have a license to make use of a mining facility in Schraplau, Germany as a storage site. No active mining is being undertaken. We also have an investment in a natural gypsum mine in Spain.
Capital Expenditures
We utilize a mix of operating cash flow and debt facilities to fund our capital expenditure projects and investments. We continuously invest in safety, equipment maintenance and upgrades, and capacity to ensure continued environmental compliance and operating effectiveness of our plants. The following table sets forth our capital expenditures for the three most recent fiscal years:
| (US$ Millions) | 2024 | 2023 | 2022 | |||||||||||||||||
| North America Fiber Cement | $ | 298.1 | $ | 392.0 | $ | 188.4 | ||||||||||||||
| Asia Pacific Fiber Cement | 47.8 | 136.2 | 46.9 | |||||||||||||||||
| Europe Building Products | 89.7 | 57.8 | 18.7 | |||||||||||||||||
| R&D and Corporate | 13.7 | 5.3 | 3.8 | |||||||||||||||||
| Total Capital Expenditures | $ | 449.3 | $ | 591.3 | $ | 257.8 | ||||||||||||||
Significant active capital expenditures
At 31 March 2024, the following significant capital expenditures remain in progress:
| Project Description | Approximate Investment (In millions) | Investment to date (In millions) | Project Start Date | Expected Completion Date | Expected Nameplate Capacity Increase (mmsf) | |||||||||||||||||||||||||||
| Prattville Greenfield expansion (sheet machines #3 and #4) | US$ | 439.0 | US$ | 342.3 | Q3 FY22 | FY25 | 600 | |||||||||||||||||||||||||
Prattville ColorPlus® finishing capacity | US$ | 83.8 | US$ | 24.7 | Q2 FY23 | FY26 | N/A | |||||||||||||||||||||||||
| Orejo Brownfield expansion | € | 134.1 | € | 89.1 | Q3 FY22 | FY25 | 252 | |||||||||||||||||||||||||
Significant completed capital expenditure projects
The following is a list of significant capital expenditure projects completed in the three most recent fiscal years:
| Project Description | Total Investment (US Millions) | Fiscal Year of Expenditure | ||||||||||||
Massachusetts ColorPlus® finishing capacity | $ | 56.4 | FY21 - FY24 | |||||||||||
| Prattville Trim finishing capacity | $ | 55.1 | FY21 - FY23 | |||||||||||
| Carole Park Brownfield expansion | $ | 36.8 | FY19 - FY23 | |||||||||||
| Prattville Greenfield expansion (sheet machines #1 and #2) | $ | 241.2 | FY18 - FY22 | |||||||||||
| Summerville restart | $ | 11.1 | FY21 - FY22 | |||||||||||
Capital Divestitures
During the three most recent fiscal years, we did not make any material capital divestitures. However, in fiscal year 2024, we announced the cancellation of our plans to build a greenfield site in Truganina, Australia. For further information, see Note 7 to our consolidated financial statements in Section 2.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
James Hardie Executive Team
The Company’s management is overseen by an executive team, whose members cover the key areas of finance, human resources, investor relations, legal, manufacturing, marketing, operations, production, R&D and sales.
Members of our management executive team at 30 April 2024 are:
Aaron Erter | |||||
 | Chief Executive Officer | ||||
| Age | 50 | ||||
| Expertise, experience and skills | Aaron Erter was appointed as Chief Executive Officer (“CEO”) in September 2022. A highly experienced executive, Mr. Erter possesses deep expertise in global, multi-billion dollar organizations in the consumer and industrial sectors. Specifically, he has built and managed high-performing teams, is proficient in P&L management, strategy development, product development, marketing, sales leadership and M&A. Before coming to James Hardie, Mr. Erter served as CEO of PLZ Corp, a leader of specialty liquid and aerosol manufacturing. Mr. Erter’s other career experiences include Sherwin-Williams, where he served as global president for Sherwin’s Consumer and Industrial businesses, Valspar, where he was senior vice president and general manager of the company’s Consumer business and 15 years at Stanley Black & Decker, where he held numerous leadership roles in sales and marketing for both the Black & Decker and DEWALT Brands. Mr. Erter serves on the Board of Directors for Chicagoland Habitat for Humanity. Mr. Erter holds a Bachelor of Economics from The Wharton School at The University of Pennsylvania and an MBA from The University of Notre Dame – Mendoza College of Business. | ||||
Rachel Wilson | |||||
 | Chief Financial Officer | ||||
| Age | 52 | ||||
| Expertise, experience and skills | Rachel Wilson was appointed Chief Financial Officer (“CFO”) of James Hardie in August 2023. Ms. Wilson has a 30-year track record of driving stakeholder value for global technology, business services and consumer companies. Ms. Wilson has executed dozens of multi-billion transactions as an agent or principal and managed highly impactful finance functions including FP&A, investor relations and treasury. Prior to James Hardie, Ms. Wilson served as the Chief Financial Officer and Treasurer of R1 RCM, a healthcare IT company that services hospitals and health systems across the United States. Ms. Wilson also previously served as the SVP Finance and Treasurer for Iron Mountain, a global enterprise information management company, and later, as its Chief Financial Officer, Data Centers. Ms. Wilson was appointed to the Security and Exchange Commission’s (SEC) inaugural Fixed Income Market Structure Advisory Committee in 2017, and was named “Best Investor Relations Professional, Sell Side,” by Institutional Investor in 2016. Ms. Wilson holds a joint B.A. and M.A. in international economics and international relations from Johns Hopkins University and an MBA from Columbia Business School. | ||||
Farhaj Majeed | |||||
 | Chief Human Resources Officer | ||||
| Age | 46 | ||||
| Expertise, experience and skills | Farhaj Majeed joined James Hardie as Chief Human Resources Officer (“CHRO”) in February 2023. Mr. Majeed is an accomplished human relations professional with over 20 years of experience. Prior to James Hardie, Mr. Majeed held a variety of global and regional HR roles with top-tier companies such as Kraft Foods, Mondelez International, Abbott Laboratories and most recently, Whirlpool Corporation, where he led the Europe and MEA region as VP & CHRO, EMEA. Mr. Majeed holds an MBA from the Institute of Business Management with an emphasis on Human Resources and Marketing. | ||||
Tim Beastrom | |||||
 | Chief Legal Counsel and Chief Compliance Officer | ||||
| Age | 57 | ||||
| Expertise, experience and skills | Tim Beastrom joined James Hardie in January 2023 as Chief Legal Counsel and Chief Compliance Officer. Mr. Beastrom’s resume includes 25 years of in-house legal counsel focusing on corporate governance, securities law, environmental, social and governance risk oversight, mergers and acquisitions and commercial law. Before starting at James Hardie, Mr. Beastrom was Chief Securities Counsel and Associate General Counsel at Ecolab, Inc. Mr. Beastrom received his Juris Doctor from the University of Minnesota Law School and holds a Bachelor of Arts in business administration and management from Gustavus Adolphus College. | ||||
Sean Gadd | |||||
 | President, North America | ||||
| Age | 51 | ||||
| Expertise, experience and skills | Sean Gadd serves as President of North America for James Hardie, a position he’s held since January 2022. Mr. Gadd began his career at James Hardie in 2004 as a Regional Engineering Manager for the Asia Pacific business and progressed to Plant Manager for both the Carole Park and Rosehill facilities in Australia. Mr. Gadd then moved to the U.S. in 2006 to take on the role of Manufacturing Manager for various manufacturing facilities across the United States. Since then, Mr. Gadd has had a variety of roles with increasing levels of responsibilities. In October 2015, he was appointed Executive Vice President, Markets and Segments, North America, with responsibility for strategic marketing and development. In December 2018, Mr. Gadd was appointed Executive Vice President, North America, Commercial, where his responsibilities included sales, product development and marketing prior to his current appointment as President, North America. Mr. Gadd holds a Bachelor of Science in Engineering from the University of New South Wales and an MBA from its business school, the Australian Graduate School of Management. | ||||
| Joe Liu | |||||
 | Chief Technology Officer | ||||
| Age | 61 | ||||
| Expertise, experience and skills | Joe Liu serves as James Hardie’s Chief Technology Officer (“CTO”), a role he’s held since January 2022. In his role, Mr. Liu leads the firm’s global research and development and innovation efforts. Before taking over CTO duties, Mr. Liu was general manager for James Hardie’s Asia Pacific business. Prior to James Hardie, Mr. Liu had an impressive 26 year career with 3M, where he held a variety of senior leadership roles in research and development, as well as commercial and international management. Mr. Liu holds a Bachelor of Science and a Ph.D. in thermal energy and power engineering from Xi’an Jiao Tong University in China and an additional Ph.D. in mechanics from the University of Minnesota. | ||||
| James Johnson II | |||||
 | Chief Information Officer | ||||
| Age | 52 | ||||
| Expertise, experience and skills | James Johnson II is James Hardie’s Chief Information Officer (“CIO”), a position he’s held since December 2021. With a proven track record of developing effective, leading-edge technology solutions that create business value, he is responsible for all aspects of information technology and cyber security globally. Mr. Johnson brings over 25 years of relevant and progressive IT experience, including 15 years as CIO for businesses in a variety of industries, including chemicals and metals companies. Most recently, Mr. Johnson held the role of CIO at Carpenter Technology and has also held IT roles with Honeywell International, Performance Fibers and Trinseo. Mr. Johnson holds a Bachelor of Arts in economics from the University of Virginia and an MBA from the University of Maryland. | ||||
Ryan Kilcullen | |||||
 | Executive Vice President, Global Operations | ||||
| Age | 43 | ||||
| Expertise, experience and skills | Ryan Kilcullen is Executive Vice President of James Hardie’s Global Operations, a position he’s held since January 2022. Mr. Kilcullen joined the company in 2007 as a PcI/PdI Engineer. Since then, Mr. Kilcullen has worked for the company in various manufacturing and supply chain roles including Process Engineer, Production Manager and Supply Chain Engineer. Mr. Kilcullen was appointed Executive Vice President – North America Operations in 2016, where he was responsible for the company's supply chain, manufacturing, engineering and environmental and health & safety operations. Mr. Kilcullen holds a Bachelor of Science in industrial engineering from Rensselaer Polytechnic Institute and a Master of Engineering in logistics from the Massachusetts Institute of Technology. | ||||
John Arneil | |||||
 | President, Asia Pacific | ||||
| Age | 44 | ||||
| Expertise, experience and skills | John Arneil is President of James Hardie’s Asia Pacific operations, a role he’s held since February 2023. Since joining the company more than twenty years ago, Mr. Arneil has built an impressive career, having worked in James Hardie’s European, North American, and Asia Pacific businesses in a variety of commercial and operational roles. Mr. Arneil has enjoyed exposure to multiple markets in different phases of business maturity and complexity enabling him to fully understand value creation from a consumer and customer perspective and how that translates end-to-end through innovation, manufacturing, commercialization and supply chain management. This, coupled with deep industry relationships has enabled Mr. Arneil to deliver record results for the Australian and New Zealand businesses year-over-year. Mr. Arneil has a Bachelor of Business Management from The University of Queensland in Australia and a Master of Business Administration from The University of Leicester in the UK. | ||||
Christian Claus | |||||
 | President, Europe | ||||
| Age | 41 | ||||
| Expertise, experience and skills | Christian Claus is the President of James Hardie’s Europe business, a position he’s held since January 2023. Prior to James Hardie, Mr. Claus held multiple leadership positions at Tarkett, a leading sustainable flooring and sports surface firm based out of Paris. Mr. Claus also held senior leadership positions at Air Liquide, the world’s leading manufacturer of industrial gases, as well as various commercial and international management roles at 3M. Mr. Claus holds both an undergraduate and MBA from Heinrich Heine University in Duesseldorf, Germany and has completed numerous executive education programs at Harvard Business School, London Business School and the Massachusetts Institute of Technology. | ||||
Jill Kolling | |||||
 | Chief Sustainability Officer | ||||
| Age | 58 | ||||
| Expertise, experience and skills | Jill Kolling has served as Jame’s Hardie’s Chief Sustainability Officer (“CSO”) since March 2022. Ms. Kolling is responsible for the development and execution of James Hardie’s global environment, social and governance strategy, ensuring integration with the company’s overall business goals. Prior to James Hardie, Ms. Kolling was the vice president for global sustainability at American conglomerate Cargill and built the first-ever global sustainability function for the corporation. Ms. Kolling has a proven track record of applying strategic insights and systems thinking to optimize shareholder value, positive environmental outcome and social good. Ms. Kolling holds a Bachelor of Science in mechanical engineering and a Master of Science in computer science, both from the University of Minnesota. | ||||
Stephen Balsavich | |||||
 | Global Head of Transformation | ||||
| Age | 43 | ||||
| Expertise, experience and skills | Stephen Balsavich has served as Jame’s Hardie’s Global Head of Transformation since December 2021. Mr. Balsavich is responsible for leading the coordination and execution of various strategic and change initiatives. Mr. Balsavich began his career at James Hardie in 2016 and has worked on both finance and IT teams. During James Hardie’s acquisition of Fermacell in Europe, Mr. Balsavich served as the PMO and IT lead, which included integration efforts post deal closing. Prior to James Hardie, Mr. Balsavich spent most of his career in mergers and acquisitions for PricewaterhouseCoopers (PwC). Mr. Balsavich holds a Bachelor of Science in finance from the University of Illinois and an MBA from Dominican University. | ||||
Joel Wasserman | |||||
 | Vice President, Corporate Communications and Global Brand Management | ||||
| Age | 62 | ||||
| Expertise, experience and skills | Joel Wasserman joined James Hardie as VP of Corporate Communications and Global Brand Management in January 2023. Mr. Wasserman is responsible for the company’s global marketing and communications initiatives. He has more than 35 years of progressive communications and marketing experience that includes work at integrated marketing agencies and consumer products companies. Prior to his role with James Hardie, Mr. Wasserman spent ten years with Sherwin-Williams and Valspar where he was responsible for strategic planning and brand management for all paint brands in the consumer brands group. During his career, Mr. Wasserman has supported marketing and communications efforts for dozens of global companies and brands including Citibank, Kellogg’s, Kraft Foods and Black & Decker. Mr. Wasserman holds a Bachelor of Science in Economics from Northern Illinois University. | ||||
Board of Directors
James Hardie’s Board of Directors (the “Board”) have widespread experience, spanning general management, finance, manufacturing, marketing and accounting. Each non-executive director also brings valuable international experience that assists with James Hardie’s growth. For additional information, see “Section 1 - Corporate Governance Report” of this Annual Report.
Members of the Board at 30 April 2024 are:
Anne Lloyd, BS, CPA | |||||
 | Independent, Non-Executive Chair Appointed to the Board November 2018 Appointed as Chair November 2022 Current term expires November 2025 | ||||
| Age | 62 | ||||
| Committees | None | ||||
| Qualifications | Certified Public Accountant (CPA); BS in Business Administration (University of North Carolina) | ||||
| Expertise, experience and skills | Anne Lloyd was appointed as an independent non-executive director of James Hardie in November 2018. Ms. Lloyd served as a member of the Audit Committee from the date of her appointment during her entire tenure as a Board member, with the exception of the period from 26 August 2019 through 25 February 2020, during which time she served as Interim CFO. She was appointed Chair of the Audit Committee effective 8 August 2020 and Deputy Chairperson effective 10 August 2022. She also served as Lead Independent Director from 6 January 2022 to 1 September 2022. Ms Lloyd was appointed Chair of the Board effective 3 November 2022 at which time she stepped down as Chair of the Audit Committee. Ms Lloyd, an experienced corporate and finance executive, served as Chief Financial Officer of Martin Marietta Materials, Inc. a leading supplier of aggregates and heavy building materials, for over 12 years from June 2005 until her retirement in August 2017. She joined Martin Marietta in 1998 as Vice President and Controller and was promoted to Chief Accounting Officer in 1999. She was subsequently appointed Treasurer (2006-2013) and promoted to Executive Vice President in 2009. Earlier in her career, Ms Lloyd spent 14 years with Ernst & Young LLP (1984-1998), latterly as a senior manager and client service executive for the natural resources, mining, insurance and healthcare industries. | ||||
| Other current directorships (Listed) | Insteel Industries, Inc (NYSE:IIIN) (since 2019); Highwoods Properties, Inc. (NYSE:HIW) (since 2018) | ||||
| Other current directorships (Unlisted) | New Frontier Materials LLC (since 2021) | ||||
| Former listed company directorships (last five years) | None | ||||
| Residency | United States | ||||
Peter-John Davis | |||||
 | Independent, Non-Executive Director Appointed to the Board August 2022 Current term expires August 2025 | ||||
| Age | 65 | ||||
| Committees | Nominating and Governance Committee (Member) | ||||
| Qualifications | Advanced Management Program (Harvard Business School); Foundation Member of Australian Institute of Company Directors (AICD) | ||||
| Expertise, experience and skills | Peter John (PJ) Davis previously served as Chief Operating Officer (COO) of Bunnings Australia & New Zealand. During his 15-year tenure as COO, the division was one of the most profitable of the Wesfarmers Group. With over 40 years’ experience in various retail and trade formats and home improvement industries, Mr Davis commenced his career on the sales floor and held senior roles in operations, marketing, advertising and merchandising before moving into general management and leading the development of the highly successful Bunnings Warehouse concept. Mr Davis was responsible for the development, strategic direction, and operational management of the Bunnings businesses and its employees. His main objectives were to ensure growth in revenues and profitability and provide satisfactory returns for shareholders. Mr Davis completed the Advanced Management Program at Harvard Business School in Boston, USA and is the Founding Director ANRA (Australian National Retailers Association) and Foundation Member of the Australian Institute of Company Directors. | ||||
| Other current directorships (Listed) | None | ||||
| Other current directorships (Unlisted) | None | ||||
| Former listed company directorships (last five years) | None | ||||
| Residency | Australia | ||||
Persio V. Lisboa, BS | |||||
 | Independent, Non-Executive Director Appointed to the Board February 2018 Current term expires August 2024 | ||||
| Age | 58 | ||||
| Committees | Remuneration Committee (Chair); Nominating and Governance Committee (Member) | ||||
| Qualifications | BS in Business Administration (Pontificia Universidade Catolica University) | ||||
| Expertise, experience and skills | Mr Lisboa has extensive senior executive experience. He served as President and Chief Executive Officer of Navistar, Inc. (Navistar), a leading manufacturer of commercial trucks, buses, defense vehicles and engines, a position he held from July 2020 to September 2021, when he decided to retire. Prior to that position, Mr Lisboa served at Navistar as Executive Vice President and Chief Operating Officer from March 2017 to July 2020, President of Operations from November 2014 to March 2017, Chief Procurement Officer from October 2011 to November 2014, and several other key senior leadership positions since 2005. Prior to these, Mr Lisboa held various senior leadership positions within Navistar’s South American operations. Mr Lisboa began his career at Maxion International Motores Brasil in 1986. | ||||
| Other current directorships (Listed) | J.B. Hunt Transport Services Inc. (NASDAQ: JBHT) (since 2023) | ||||
| Other current directorships (Unlisted) | Ascendance Trucks, LLC. (since 2023); Allegiance Trucks, LLC. (since 2023) | ||||
| Former listed company directorships (last five years) | None | ||||
| Residency | United States | ||||
Renee J. Peterson, BS, MBA | |||||
 | Independent, Non-Executive Director Appointed to the Board November 2022 Current term expires August 2026 | ||||
| Age | 63 | ||||
| Committees | Audit Committee (Chair) | ||||
| Qualifications | BS in Accounting (St. Cloud State University Herberger Business School); MBA (University of Minnesota); Certified Public Accountant (inactive); Six-Sigma Green Belt | ||||
| Expertise, experience and skills | Ms Peterson served as CFO for The Toro Company, a leading worldwide provider of innovative solutions for the outdoor environment with responsibility for all aspects of finance, information technology and investor relations, until March 2023. She continued to serve as Vice President until July 2023. She previously served as Eaton Corporation’s Vice President of Finance and Planning for the company’s truck and automotive segments. Prior to joining Eaton, Ms Peterson served in various financial leadership positions of increasing responsibility at Honeywell International over 25-years. Ms Peterson’s career has spanned several different areas within the industrial sector, including aerospace, automotive, construction and consumer products. She earned her Bachelor of Science degree in accounting from St. Cloud State University Herberger Business School and an MBA from the University of Minnesota. She is a certified public accountant (inactive) and holds a six-sigma green belt certification. Ms Peterson is an independent director for Franklin Electric (FELE), a global leader in the manufacturing and distribution of water and fueling products and solutions and is currently Audit Committee Chair. She also serves as the executive sponsor for the Franklin Women’s Network. She previously served on the Board of the Greater Twin Cities United Way (GTCUW) as the Treasurer and Finance & Human Capital Committee Chair and was also a member of the GTCUW Executive Committee. Ms Peterson is also a member of the MN Women’s Economic Roundtable (MWER) and Women Corporate Directors. | ||||
| Other current directorships (Listed) | Franklin Electric (NASDAQ:FELE) (since 2015) | ||||
| Other current directorships (Unlisted) | None | ||||
| Former listed company directorships (last five years) | None | ||||
| Residency | United States | ||||
Rada Rodriguez, MSc | |||||
 | Independent, Non-Executive Director Appointed to the Board November 2018 Current term expires November 2025 | ||||
| Age | 65 | ||||
| Committees | Nominating and Governance Committee (Chair); Remuneration Committee (Member) | ||||
| Qualifications | MSc Construction Engineering, Diploma in Efficient Board Management (Institute of Directors, UK) | ||||
| Expertise, experience and skills | Ms Rodriguez serves as Chief Executive Officer of Signify DACH, part of the Signify Group, a world leader in connected LED lighting systems, software and services, since May 2021. She previously served as Chief Executive Officer of Schneider Electric GmbH, part of Schneider Electric Group, a global energy management and automation company and served as Senior Vice President, Corporate Alliances until 2021. On joining the company in 1999, she held a progression of senior roles including Head of International Research and Development for Schneider Electric Sweden, and Senior Vice President and Zone President, Central and Eastern Europe. Prior to joining Schneider Electric GmbH, she worked at Level Group (later acquired by Schneider) and before that she worked for 5 years at Colasit Scandinavia AB, a Swiss industrial machinery manufacturer. She started her career with K-Konsult AB, a Swedish technical consulting firm with a focus on installation technology where she worked for 5 years as a design engineer. | ||||
| Other current directorships (Listed) | None | ||||
| Other current directorships (Unlisted) | ZVEI (since 2014) | ||||
| Former listed company directorships (last five years) | None | ||||
| Residency | Germany | ||||
Suzanne B Rowland, MS, BS | |||||
 | Independent, Non-Executive Director Appointed to the Board February 2021 Current term expires August 2024 | ||||
| Age | 62 | ||||
| Committees | Audit Committee (Member); Remuneration Committee (Member) | ||||
| Qualifications | BS in Chemical Engineering (University of Pennsylvania); Master of Science in Business Studies (London Business School) | ||||
| Expertise, experience and skills | Ms Rowland has extensive senior executive experience leading complex global materials and industrial businesses. She most recently served as Group Vice President of the Industrial Specialties business at Ashland Global Holdings Inc. from 2016 to 2019 where she aligned commercial and asset strategies driving focused profitable growth. Prior to this, Ms Rowland served in separate Vice President and General Manager roles in Tyco International plc between 2009 and 2015 where she led significant improvements in customer relationships, market share gains, pricing, operational execution, and acquisition integration. Before joining Tyco, Ms Rowland worked for Rohm and Haas Company for over twenty years, where she held multiple senior executive roles including turning around the global Adhesives division and leading Procurement & Logistics for the company. In 2023, Ms Rowland earned the Sustainability and Climate Risk Certificate from the Global Association of Risk Professionals. | ||||
| Other current directorships (Listed) | Sealed Air Corporation (NYSE: SEE) (since 2020) | ||||
| Other current directorships (Unlisted) | None | ||||
| Former listed company directorships (last five years) | SPX Flow, Inc. (NYSE: SPXC) (2018-2022); L.B. Foster Co. (NASDAQ: FSTR) (2008-2022) | ||||
| Residency | United States | ||||
Nigel Stein, CA, BSc | |||||
 | Independent, Non-Executive Director Appointed to the Board May 2020 Current term expires August 2026 | ||||
| Age | 68 | ||||
| Committees | Audit Committee (Member); Nominating and Governance Committee (Member) | ||||
| Qualifications | Bachelor of Science in Mechanical Engineering (Edinburgh University); Chartered Accountant (CA) (Institute of Chartered Accountants of Scotland) | ||||
| Expertise, experience and skills | Mr Stein has extensive experience in the global automotive and manufacturing sectors. He previously served as Chairman of Inchcape plc (Inchcape), an automotive distribution, retail and financing company, a position he held from May 2018 to May 2024 and as a non-executive director from October 2015 to May 2024. Prior to holding this position, Mr Stein served as Chief Executive Officer of GKN Ltd (GKN) (formerly GKN plc) from January 2012 to December 2017. He joined the automotive and aerospace components supplier in 1994 and during his time with GKN held various senior positions in general management and finance including six years as Group Chief Financial Officer. Earlier in his career, Mr Stein held senior finance positions with Laird plc and Hestair plc. From 2003 until 2011, he served as an independent non-executive director on the Board of Ferguson (formerly Wolseley) plc, the leading specialist distributor of plumbing and heating products in North America. Mr Stein is a member of the Institute of Chartered Accountants of Scotland. | ||||
| Other current directorships (Listed) | None | ||||
| Other current directorships (Unlisted) | None | ||||
| Former listed company directorships (last five years) | Inchcape PLC (LSE: INCH) (2015 - 2024) | ||||
| Residency | United Kingdom | ||||
Harold Wiens, BS | |||||
 | Independent, Non-Executive Director Appointed to the Board May 2020 Current term expires August 2026 | ||||
| Age | 77 | ||||
| Committees | Audit Committee (Member) | ||||
| Qualifications | Bachelor of Science in Mechanical Engineering (Michigan Technological University) | ||||
| Expertise, experience and skills | Mr Wiens worked at 3M Company (3M) for thirty-eight years. He served as Executive Vice President, Industrial Business and Transportation Business from 1998 until his retirement from 3M in 2006. It is 3M’s largest and most diverse business serving many different end markets ranging from electronic to automotive and aerospace manufacturing. During this time, Mr Wiens restructured the business, leading a global implementation of Six Sigma that drove significant international growth. Prior to holding this position, Mr Wiens served as Executive Vice President, Sumitomo 3M, 3M’s largest subsidiary, headquartered in Tokyo, Japan, from 1995 to 1998 and served as Data Storage Business Leader and Vice President from 1988 to 1995 and as Memory Technologies Group Manufacturing Manager from 1983 to 1988. Mr Wiens began his career with 3M in 1968 and held many positions of increasing responsibility over his first fifteen years with 3M. | ||||
| Other current directorships (Listed) | None | ||||
| Other current directorships (Unlisted) | Rejuvi Venture LLC. (since 2021) | ||||
| Former listed company directorships (last five years) | Bio-Techne Corporation (NASDAQ:TECH) (2014 - 2020) | ||||
| Residency | United States | ||||
Remuneration Report
This Remuneration Report describes the executive remuneration philosophy, programs and objectives of the Remuneration Committee and the Board of Directors (the “Board”), as well as the executive remuneration plans and programs implemented by James Hardie.
We are not required to produce a remuneration report under applicable Irish, Australian or US rules or regulations. However, taking into consideration our significant Australian and US shareholder bases and our primary listing on the Australian Securities Exchange (“ASX”), we have voluntarily produced a remuneration report consistent with those provided by similarly situated companies for non-binding shareholder approval since 2005.
This Remuneration Report outlines the key remuneration plans and programs and share ownership information for our Board of Directors and certain of our senior executive officers (Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the other three highest paid executive officers based on total compensation that was earned or accrued for fiscal year 2024) (“Senior Executive Officers”) in fiscal year 2024, and also includes an outline of the key changes for fiscal year 2025. Further details of these changes will be set out in the 2024 Notice of Annual General Meeting (“AGM”).
For fiscal year 2024, our senior executive officers are:
•Aaron Erter, Chief Executive Officer;
•Rachel Wilson, Chief Financial Officer (effective 16 August 2023);
•Sean Gadd, President, North America;
•Ryan Kilcullen, Executive Vice President, Global Operations;
•Timothy Beastrom, Chief Legal Officer; and
•Jason Miele, Chief Financial Officer (former Chief Financial Officer).
As previously announced, Mr Jason Miele ended his service as Chief Financial Officer on 16 August 2023 and remained as a consultant until 17 November 2023.
This Remuneration Report has been adopted by our Board on the recommendation of the Remuneration Committee.
EXECUTIVE SUMMARY
Fiscal Year 2024 Business Highlights1
Our operating results for fiscal year 2024 reflected solid financial results, highlighted by record net sales of US$3.9 billion, an increase of 4% compared to fiscal year 2023. Adjusted earnings before interest and taxes (“EBIT”) of US$941 million and Adjusted net income of US$708 million in fiscal year 2024 increased 21% and 17%, respectively, compared to fiscal year 2023.
The following graphs show our performance for key financial measures during fiscal year 2024, with a comparison to prior corresponding periods:
____________
1Please see the “Glossary of Abbreviations and Definitions” in Section 4 of this Annual Report for a reconciliation of non-GAAP financial measures used in this Remuneration Report to the most directly comparable US GAAP financial measure.
Fiscal Year 2024 Compensation Highlights
Our fiscal year 2024 compensation continued to reflect and promote our pay-for-performance philosophy and our stated goal to position Senior Executive Officer fixed base salary and benefits at the median and total target direct remuneration (comprising fixed and target variable remuneration) at the 75th percentile of our Peer Group (defined herein), if stretch short- and long-term target performance goals are met.
The following is a summary of the key aspects and events that occurred relative to the Company’s remuneration policies, programs and arrangements during the course of fiscal year 2024:
•No changes were made to the core design of the of our Short-Term Incentive program in fiscal year 2024, which is comprised of both the Company Performance Plan (“CP Plan”) and Individual Performance Plan (“IP Plan”). The CP Plan continues to measure both Growth and Returns when assessing Company performance and shareholder value creation. A complete description of the CP Plan for fiscal year 2024 is set out in the section titled “Incentive Arrangements” later in this Remuneration Report.
•No changes were made to the design of the LTI Plan for fiscal year 2024. The LTI plan remains similar to the fiscal year 2023 plan with updated financial targets. A complete description of the LTI program, including the applicable performance hurdles, is set out in the section titled “Incentive Arrangements” later in this Remuneration Report.
Fiscal Year 2024 Total Target Compensation
Remuneration packages for Senior Executive Officers reflect our remuneration philosophy and comprise a mixture of fixed base salary, benefits and variable performance-based incentives. The Remuneration Committee seeks to appropriately balance fixed and variable remuneration in order to align our total compensation structure with our pay-for-performance philosophy. The following chart summarizes total target compensation awarded to each Senior Executive Officer in fiscal year 2024:
| Summary of Fiscal Year 2024 Senior Executive Officer Target Compensation | |||||||||||||||||
| Senior Executive Officer | FY2024 Annual Base Salary (US$) | FY2024 STI Target Value (US$) | FY2024 LTI Target Value (US$) | FY2024 Total Target Compensation (US$) | |||||||||||||
| A Erter | 1,038,000 | 1,245,600 | 5,320,000 | 7,603,600 | |||||||||||||
| R Wilson | 620,000 | 434,000 | 1,000,000 | 2,054,000 | |||||||||||||
| S Gadd | 672,750 | 470,925 | 1,000,000 | 2,143,675 | |||||||||||||
| R Kilcullen | 480,000 | 312,000 | 650,000 | 1,442,000 | |||||||||||||
| T Beastrom | 450,000 | 270,000 | 400,000 | 1,120,000 | |||||||||||||
Ms Wilson received a sign on US$500,000 restricted stock unit award with one-third vesting on 17 August 2024, 2025, and 2026. Ms Wilson also received a sign on US$500,000 Relative TSR RSU award vesting on 17 August 2026 subject to performance hurdles.
Results of 2023 Remuneration Report Vote
In August 2023, our shareholders were asked to cast a non-binding advisory vote on our remuneration report for the fiscal year ended 31 March 2023. Although we are not required under applicable Irish, Australian or US laws or regulations to provide a shareholder vote on our executive remuneration practices, the Board believes that it is important to engage shareholders on this important issue and we
have voluntarily submitted our remuneration report for non-binding shareholder approval on an annual basis since 2005 and currently intend to continue to do so.
At our 2023 Annual General Meeting, our shareholders approved our remuneration report, with 88.9% of the votes cast in support of our remuneration program. The Remuneration Committee considered the results of this advisory vote, together with investor feedback and other factors and data associated with strategic priorities discussed in this Remuneration Report, in determining our executive remuneration policies, objectives and decisions and related shareholder engagement efforts for fiscal year 2024.
APPROACH TO SENIOR EXECUTIVE REMUNERATION
Remuneration Philosophy
As our largest operating business and all of our Senior Executive Officers are located in the US, our remuneration philosophy is to provide our Senior Executive Officers with an overall package that is competitive with Peer Group companies exposed to the US housing and consumer durables market. Within this philosophy, the executive remuneration framework emphasizes operational excellence and shareholder value creation through incentives that link executive remuneration with the interests of shareholders. Our remuneration plans and programs are structured to enable us to: (i) attract and retain talented executives; (ii) reward outstanding individual and corporate performance; and (iii) align the interests of our executives to the interests of our shareholders, with the ultimate goal of creating long-term value for our shareholders. This pay-for-performance system continues to serve as the framework for executive remuneration, aligning the remuneration received with the performance achieved.
Composition of Remuneration Packages
In line with our remuneration philosophy, our goal is to position Senior Executive Officer fixed base salary and benefits at the median and total target direct remuneration (comprising fixed and target variable remuneration) at the 75th percentile of our Peer Group, if stretch short- and long-term target performance goals are met. Performance goals for target variable performance-based incentive remuneration are set with the expectation that we will deliver results in the top quartile of our Peer Group. Performance below this level will result in variable remuneration payments below target (and potentially zero for poor performance). Performance above this level will result in variable remuneration payments above target.
Relative Weightings of Fixed and Variable Remuneration
The charts below detail the relative weightings of fixed versus variable remuneration for our CEO and other Senior Executive Officers for fiscal year 2024. Fixed remuneration includes base salary and variable remuneration is comprised of target STI awards and the following three LTI components: (i) Relative Total Shareholder Return (“TSR”) Restricted Stock Units (“RSUs”); (ii) Return on Capital Employed (“ROCE”) RSUs; and (iii) Scorecard LTI at target, each of which are discussed in more detail in this Remuneration Report.
Setting Remuneration Packages
Remuneration decisions are based on the executive remuneration philosophy and framework described in this Remuneration Report. The Remuneration Committee reviews and the Board approves this framework each year.
Remuneration packages for Senior Executive Officers are evaluated each year to make sure that they continue to align with our compensation philosophy, are competitive with our Peer Group and developments in the market, and continue to support our business structure and objectives. In making decisions regarding individual Senior Executive Officers, the Remuneration Committee takes into account both the results of an annual remuneration positioning review provided by the Remuneration Committee’s independent advisers and the Senior Executive Officer’s responsibilities and performance.
All aspects of the remuneration package for our CEO and CFO are determined by the Remuneration Committee and ratified by the Board. All aspects of the remuneration package for the remaining Senior Executive Officers are determined by the Remuneration Committee on the recommendation of the CEO.
Remuneration Committee Governance
The remuneration program for our Senior Executive Officers is overseen by our Remuneration Committee, the members of which are appointed by the Board. As prescribed by the Remuneration Committee Charter, the duties of the Remuneration Committee include, among other things: (i) administering and making recommendations on our incentive compensation and equity-based remuneration plans; (ii) reviewing the remuneration framework for the Company; and (iii) making recommendations to the Board on recruitment, retention and termination policies and procedures for senior management. The current members of the Remuneration Committee are Persio Lisboa
(Chairman), PJ Davis, Rada Rodriguez and Suzanne Rowland, all of whom are independent non-executive directors. A more complete description of these and other Remuneration Committee functions is contained in the Remuneration Committee’s Charter, a copy of which is available on our Investor Relations website (ir.jameshardie.com.au).
Summary of Executive Compensation Practices
The following table summarizes certain of the key governance practices employed by the Remuneration Committee relative to our executive compensation practices, including those practices which we believe are important drivers of both short- and long-term corporate performance and those practices which we believe are not aligned with the long-term interests of our shareholders:
| Compensation Practices We Employ | |||||||||||
ü | Retain independent compensation advisers reporting directly to the Remuneration Committee | û | Prohibition on hedging of stock held by executives and directors | ||||||||
ü | Pay for performance model, with approximately 86% of our CEO’s total target compensation being performance-based “at risk” compensation and an average of approximately 66% total target compensation being performance-based “at risk” compensation for our other Senior Executive Officers | û | Limited employment agreements and severance arrangements | ||||||||
ü | Circuit breaker on annual STI awards to ensure that no annual incentive awards are paid unless minimum North America growth and corporate performance levels are achieved | û | Limited change-in-control benefits | ||||||||
ü | Set share ownership requirements for all directors and Senior Executive Officers and Vice Presidents | û | No dividends paid on unvested equity awards | ||||||||
ü | Broad clawback policy on performance-based compensation | û | Limited perquisites and other benefits | ||||||||
ü | Set performance-based vesting conditions for all equity grants to Senior Executive Officers | û | No annual time-based LTI equity grants to Senior Executive Officers | ||||||||
ü | Provide the Remuneration Committee with ability to exercise “negative” discretion when determining the vesting and payout of our LTI programs | û | No excessive retirement or deferred compensation arrangements | ||||||||
Remuneration Advisers
As permitted by the Remuneration Committee Charter, the Remuneration Committee retained FW Cook (in the US) and Guerdon Associates (in Australia) as its independent advisers for matters regarding remuneration for fiscal year 2024. The Remuneration Committee reviews the appointment of its advisers each year. Both FW Cook and Guerdon Associates provided the Remuneration Committee with written certification during fiscal year 2024 to support their re-appointment. In those certifications, the advisers: (i) confirmed that their pay recommendations were made without undue influence from any member of our management; and (ii) provided detailed responses to the six independence factors a Remuneration Committee should consider under relevant NYSE rules, and confirmed their independence based on these factors.
The Remuneration Committee reviewed these certifications before re-appointing each advisor for fiscal year 2024.
Benchmarking Analysis
To assist the Remuneration Committee in making remuneration decisions, the Remuneration Committee evaluates the remuneration of our Senior Executive Officers against a designated set of companies (the “Peer Group”). The Peer Group, which is reviewed by the Remuneration Committee on an annual basis, consists of companies that are similar to us in terms of certain factors. The Remuneration Committee believes that US based companies are a more appropriate peer group than Australian based companies, as they are exposed to the same macroeconomic factors in the US housing market as those we face.
For fiscal year 2024, the factors used to review and define the Peer Group included:
•Size (revenue and market cap);
•Industry (builders and suppliers);
•Exposure to the US housing market;
•Operates and services global markets; and
•Focus on innovation and intellectual property as a differentiating factor for the business.
As a result, it was decided to retain the peer group as identified for FY2023. Below are the names of the 22 companies comprising the Peer Group, which was used to benchmark the remuneration of our Senior Executive Officers in fiscal year 2024.
| A.O. Smith Corporation | Louisiana-Pacific Corp | The Toro Company | ||||||||||||
| Acuity Brands, Inc | Martin Marietta Materials, Inc | Toll Brothers, Inc. | ||||||||||||
| American Woodmark Corp | Masco Corporation | Trex Co., Inc | ||||||||||||
| Armstrong World Indus, Inc | Mohawk Industries, Inc | Valmont Industries, Inc | ||||||||||||
| Builders FirstSource, Inc. | NVR, Inc. | Vulcan Materials Co | ||||||||||||
| Carlisle Companies Incorporated | Newell Brands, Inc. | Watsco, Inc | ||||||||||||
| Fortune Brands Home & Security | Owens Corning | |||||||||||||
| Lennox International, Inc | Simpson Manufacturing Co., Inc | |||||||||||||
Performance Linkage with Remuneration Policy
During its annual review, the Remuneration Committee assessed our performance in fiscal year 2024 against:
•our historical performance;
•our Peer Group;
•the goals in our STI and LTI variable remuneration plans; and
•the key objectives and measures the Board expects to see achieved, which are set forth in what is referred to as the “Scorecard” and further discussed later in this Remuneration Report.
Based on that review, the Board and the Remuneration Committee concluded that management’s performance in fiscal year 2024 was strong. Management continued to drive profitable growth achieving record FY24 Net Sales globally, record EBIT in North America, and record EBIT margin in North America and APAC. The long-term incentive plan three-year ROCE performance exceeded expectations and the long-term strategic measures included in the Scorecard resulted in above target payouts.
More details about this assessment are set out below in this Remuneration Report.
DESCRIPTION OF 2024 REMUNERATION ELEMENTS
Base Salaries and Other Fixed Remuneration Benefits
Base salary provides a guaranteed level of income that recognizes the market value of the position and internal equities between roles, as well as the individual’s capability, experience and performance. Annual base salary increases are not automatic. Base salaries for Senior Executive Officers are positioned around the market median for positions of similar responsibility and are reviewed by the Remuneration Committee each year.
In addition, Senior Executive Officers may receive certain other limited fixed benefits, such as medical and life insurance benefits, car allowances, participation in executive wellness programs and an annual financial planning allowance. For fiscal year 2024, the base salary and value of other fixed benefits for each of our Senior Executive Officers is provided in the Base Pay and Other Benefits columns of the remuneration table in the section titled “Remuneration Paid to Senior Executive Officers”.
Retirement Plan
In every country in which we operate, we offer employees access to pension, superannuation or individual retirement savings plans consistent with the laws of the respective country.
In the US, we sponsor a defined contribution plan, the James Hardie Retirement and Profit Sharing Plan (the “401(k) Plan”). The 401(k) Plan is a tax-qualified retirement and savings plan covering all US employees, including our Senior Executive Officers, subject to certain eligibility requirements as defined by the Internal Revenue Service (the “IRS”). In addition, we match employee contributions dollar for dollar up to a maximum of the first 6% of an employee’s eligible compensation.
Non-Qualified Deferred Compensation Plan
As of 1 January 2021, we sponsor a non-qualified deferred compensation plan, the James Hardie Executive Deferred Compensation Plan (the “Deferred Compensation Plan”). Participation in the Deferred Compensation Plan is generally limited to individuals whose annual salary exceeds the IRS limits applicable to our qualified plans or are participants in our Long-Term Incentive Plan (the “LTIP”). The Deferred Compensation Plan allows participants to elect to defer receipt of some or all of their salary or earned cash incentive to a later date. The Deferred Compensation Plan also restores matching employee contributions up to a maximum of the first 6% of an employee’s eligible compensation that would not be eligible in the 401(k) Plan due to IRS contribution limits so long as the participant defers eligible compensation to the Deferred Compensation Plan.
Incentive Arrangements
In addition to the base salary and other fixed benefits provided to our Senior Executive Officers, the Remuneration Committee reviews and approves a combination of both short-term and long-term variable incentive programs on an annual basis. For fiscal year 2024, our variable incentive plans for Senior Executive Officers were as follows:
| Duration | Plan Name | Amount | Form Incentive Paid | ||||||||
| STI (1 year) | IP Plan | 20% of STI Target | Cash | ||||||||
| CP Plan | 80% of STI Target | Cash | |||||||||
| LTI (3 years) | LTIP | 25% of LTI Target | ROCE RSUs | ||||||||
| 25% of LTI Target | TSR RSUs | ||||||||||
| 50% of LTI Target | Cash (Scorecard LTI) | ||||||||||
STI Plans
On an annual basis, the Remuneration Committee approves an STI target for all Senior Executive Officers, expressed as a percentage of base salary, which is allocated between individual goals and Company goals under the IP and CP Plans, respectively. For fiscal year 2024, the STI target percentage for Mr Erter was 120% of base salary and 70% for Messrs Gadd and Miele and Ms Wilson, 65% for Mr Kilcullen and 60% for Mr Beastrom, with 80% allocated to the CP Plan and 20% allocated to the IP Plan for all Senior Executive Officers.
CP Plan
For fiscal year 2024, the core plan design was the same as prior years. However, we changed our metrics to align with our strategic direction. We measure profitable growth primarily by using share gain and profitability metrics when assessing Company performance and shareholder value creation. These metrics continue to strengthen the connection between consistent growth and strong returns. The metrics for North America and Asia Pacific are Primary Demand Growth (“PDG”) and EBIT margin. Europe is measured against three metrics - High Value Product Volume Growth, Total Net Sales and EBIT margin. The metrics are each set with a threshold, target and maximum payout scale. The metrics and scales incentivize outstanding company performance; both driving profitable share gain to derive a payout within the payout scale reinforcing shareholder value creation. The maximum payout is 3.0x of target. For fiscal year 2024, Mr Gadd is tied to the North America STI plan.
For executives with global responsibility (Messrs Erter, Kilcullen, Beastrom and Ms Wilson), their bonus is based on global metrics of Adjusted Net Income, Return on Capital Employed (“ROCE”) and HardieTM Operating Systems (“HOS”) cost savings. We believe these metrics properly align executives with global responsibility to be focused on our strategic initiatives and profitable growth globally.
IP Plan
Under the IP Plan, the Remuneration Committee approves a series of one-year individual performance goals which, along with our leadership behaviors, are used to assess the performance of our Senior Executive Officers. The IP Plan links financial rewards to the Senior Executive Officer’s achievement of specific objectives aligned with the strategic plan and contributions to shareholder value, but are not captured directly by financial measures in the CP Plan. Each Senior Executive Officer can receive between 0% and 150% of their STI target allocated to the IP Plan with Board discretion to award up to 300% of target for members of the Executive Leadership Team (“ELT”).
The Remuneration Committee has reserved for itself discretion to change the STI paid. An example of when the Remuneration Committee would consider exercising this discretion includes external factors outside of management’s control, such as, a general shift in the housing market that is considered to have a sufficiently material impact on results. The Remuneration Committee will disclose the reasons for any such exercise of its discretion.
The Remuneration Committee believes that the payout scales are appropriate because they provide management with an incentive to achieve overall corporate goals, balance growth with returns, recognize the need to flexibly respond to strategic opportunities, and incorporate Remuneration Committee discretion to ensure appropriate outcomes.
STI Plan Performance for Fiscal Year 2024
Our CP Plan results and the subsequent STI payouts for fiscal year 2024 were as follows:
•Significantly above target in North America as a result of the record level of EBIT margin and significantly outperforming the market in Primary Demand Growth.
•Significantly above target in Asia Pacific as a result of the record level of EBIT margin and outperforming the market in Primary Demand Growth.
•Slightly below target in Europe as a result of above target EBIT margin, slightly above target Net Sales growth, and missing target for High Value Product growth.
•Significantly above target for those on global metrics as a result of record Adjusted Net Income, record ROCE, and significantly above target results in HOS savings.
Regarding the IP Plan, the Senior Executive Officers’ performance and the subsequent STI payouts for fiscal year 2024 were at or above target based on each Senior Executive Officer’s achievement of fiscal year 2024 one-year individual performance and core organizational values and leadership behavior goals.
For fiscal year 2024, the amount to be paid to each of our Senior Executive Officers under the STI Plans, inclusive of the CP portion and IP portion, is provided in the STI Award column of the remuneration table, in the section titled “Remuneration Paid to Senior Executive Officers.”
LTI Plans
Each year, the Remuneration Committee approves an LTI target for all Senior Executive Officers. The approved target is allocated between three separate components to ensure that each Senior Executive Officer’s performance is assessed across factors considered important for sustainable long-term value creation:
•ROCE RSUs are used as they are an indicator of high capital efficiency required over time;
•Relative TSR RSUs are used as they are an indicator of our performance relative to our US Peer Group; and
•Scorecard LTI is an indicator of each Senior Executive Officer’s contribution to achieving our long-term strategic goals.
Awards issued under the LTI are issued pursuant to the terms of the LTIP.
During fiscal year 2024, our Senior Executive Officers were granted the following awards:
| Time-Based RSUs | ROCE RSUs | TSR RSUs | Scorecard LTI Units | Stock options | |||||||||||||
| A Erter | — | 92,265 | 137,718 | 276,797 | — | ||||||||||||
| R Wilson | 17,343 | 17,343 | 77,659 | 52,029 | — | ||||||||||||
| S Gadd | — | 17,343 | 25,886 | 52,029 | — | ||||||||||||
| J Kilcullen | — | 11,273 | 16,826 | 33,819 | — | ||||||||||||
| T Beastrom | — | 6,937 | 10,354 | 20,811 | — | ||||||||||||
| J Miele | — | — | — | — | — | ||||||||||||
RSUs and stock options issued/exercised under our LTI programs will be settled upon vesting in CHESS Units of Foreign Securities (“CUFS”) on a 1-to-1 basis. Unless the context indicates otherwise, when we refer to our common stock, we are referring to the shares of our common stock that are represented by CUFS.
ROCE RSUs (25% of target LTI for Fiscal Years 2024-2026)
The Remuneration Committee introduced ROCE RSUs in fiscal year 2013 because the US housing market had stabilized to an extent which permitted the setting of multi-year financial metrics. The Remuneration Committee believes ROCE RSUs remain an appropriate component of the LTI Plan because they:
•tie the reward’s value to share price which provides alignment with shareholder interests;
•promote that we earn appropriate returns on capital invested; and
•reward performance that is under management’s direct influence and control; and focus management on capital efficiency as the necessary precondition for the creation of additional shareholder value.
Per the plan, the maximum payout for the ROCE RSUs is 2.0x target LTI. ROCE is determined by dividing Adjusted EBIT by Adjusted Capital Employed1. The resulting Adjusted Capital Employed for each fiscal year will be averaged using the balance at the end of each of the four quarters to better reflect capital employed through a year rather than at a single point in time.
The hurdles for ROCE RSUs granted in fiscal year 2024 (for performance in fiscal years 2024 to 2026 remained the same as fiscal year 2023 as shown in the table below:
| Fiscal Years 2024-2026 ROCE | Amount of Target to Vest | ||||||||||
| < 35.0% | 0.0x | ||||||||||
| ≥ 35.0%, but < 37.0% | 0.5x | ||||||||||
| ≥ 37.0%, but < 38.5% | 1.0x | ||||||||||
| ≥ 38.5%, but < 40.0% | 1.5x | ||||||||||
| > 40.0% | 2.0x | ||||||||||
At the conclusion of this three-year performance period, the Remuneration Committee will review management’s performance based on the quality of the returns balanced against management’s delivery of market share growth and performance against the Scorecard. Following this review, the Remuneration Committee can exercise negative discretion to reduce the number of shares received on vesting of the ROCE RSUs. This discretion can only be applied to reduce the number of shares which will vest.
____________
1 For purposes of ROCE RSU vesting, “Adjusted EBIT” and “Adjusted Capital Employed” will be calculated as follows:
“Adjusted EBIT” will be calculated as (i) EBIT as reported in our financial results; adjusted by (ii) excluding the earnings impact of legacy issues (such as asbestos adjustments); and (iii) adding back asset impairment charges in the relevant period, unless otherwise determined by the Remuneration Committee.
“Adjusted Capital Employed” will be calculated as total assets minus current liabilities as reported in our financial results; adjusted by: (i) excluding balance sheet items related to legacy issues (such as asbestos adjustments), dividends payable and deferred taxes; (ii) adding back asset impairment charges in the relevant period, unless otherwise determined by the Remuneration Committee; (iii) deducting all greenfield construction-in-progress, and any brownfield construction-in-progress projects involving capacity expansion that are individually greater than US$20 million, until such assets reach commercial production and are transferred to the fixed asset register; (iv) excluding performance from any business held for sale; and (v) excluding cash and short-term debt.
ROCE RSUs Vesting in Fiscal Year 2024 (for Fiscal Years 2022-2024)
As a component of the fiscal year 2022 LTI Plan, we granted ROCE RSUs in August 2021. The ROCE RSUs comprised 25% of each Senior Executive Officer’s LTI target and were granted assuming 2.0x target. Vesting of the ROCE RSUs is dependent on the average ROCE performance for fiscal years 2022-2024 and is subject to the Remuneration Committee’s negative discretion based on its judgment regarding the quality of returns balanced against management’s delivery of market share growth. The ROCE performance hurdles for this grant were approved as follows:
| ROCE Performance Level | Amount of Target to Vest | ||||||||||
| < 35.0% | 0.0x | ||||||||||
| ≥ 35.0%, but < 37.0% | 0.5x | ||||||||||
| ≥37.0%, but < 38.5% | 1.0x | ||||||||||
| ≥ 38.5%, but < 40.0% | 1.5x | ||||||||||
| ≥ 40.0% | 2.0x | ||||||||||
Based on the average ROCE result for fiscal years 2022-2024 of 51.1%, a 2.0x target of the ROCE RSUs granted will vest on 17 August 2024.
Relative TSR RSUs (25% of target LTI for Fiscal Years 2024-2026)
The Remuneration Committee believes that Relative TSR RSUs continue to be an appropriate component of the LTI Plan because they provide alignment with shareholders. Even if macro-economic conditions create substantial shareholder value, Senior Executive Officers will only receive payouts if the TSR of our shares exceeds a specified percentage of our Peer Group over a performance period.
Relative TSR RSUs have been a component of our LTI since fiscal year 2009. Consistent with recent prior years, the maximum payout for Relative TSR RSUs granted in fiscal year 2024 is 2.0x target LTI.
Relative TSR measures changes in our share price and the share prices of our Peer Group; and assumes all dividends and capital returns are reinvested when paid. For fiscal year 2024, our relative TSR performance will be measured against the Peer Group over a three-year performance period from grant date. To eliminate the impact of short-term share price changes, the starting point and test date are measured using a 20 trading-day average closing price. Relative TSR RSUs will vest based on the following straight-line schedule:
| Performance against Peer Group | Amount of Target to Vest | ||||||||||
| < 40th Percentile | 0.0x | ||||||||||
| 40th Percentile | 0.5x | ||||||||||
| > 40th, but < 60th Percentile | Sliding Scale | ||||||||||
| 60th Percentile | 1.0x | ||||||||||
| > 60th, but < 80th Percentile | Sliding Scale | ||||||||||
| ≥ 80th Percentile | 2.0x | ||||||||||
The Remuneration Committee will continue to monitor the design of the Relative TSR RSU component of the LTI Plan for Senior Executive Officers with the aim of balancing investor preferences with the ability to motivate and retain Senior Executive Officers.
TSR RSUs Vested for Fiscal Years 2021-2023
As part of the fiscal year 2021 LTI Plan, in August 2020 we granted three-year Relative TSR RSUs to senior executives. Vesting of these Relative TSR RSUs was dependent on our TSR performance relative to the Peer Group in place at that time, based on the following schedule:
| Performance against Peer Group | Amount of Target to Vest | ||||||||||
| < 40th Percentile | 0.0x | ||||||||||
| 40th Percentile | 0.5x | ||||||||||
| > 40th, but < 60th Percentile | Sliding Scale | ||||||||||
| 60th Percentile | 1.0x | ||||||||||
| > 60th, but < 80th Percentile | Sliding Scale | ||||||||||
| ≥ 80th Percentile | 2.0x | ||||||||||
In August 2023, the only test of Relative TSR performance was completed, resulting in our TSR performance at the 42.1st percentile of the Peer Group in place at that time. As a result, 0.138x of target outstanding Relative TSR RSUs vested.
Scorecard LTI (50% of target LTI for Fiscal Years 2024-2026)
Scorecard LTI has been a component of our LTI Plan since fiscal year 2010. Each year, the Remuneration Committee approves a number of key management objectives and the results it expects to see achieved in relation to these objectives. These objectives are incorporated into that year’s grant of Scorecard LTI. At the end of the three-year performance period, the Remuneration Committee assesses our Senior Executive Officers’ collective performance on each key objective and each individual Senior Executive Officer’s contribution to those achievements and the Board reviews this assessment. Senior Executive Officers may receive different ratings depending on the contribution they have made during the three-year performance period. Although most of the objectives in the Scorecard have quantitative targets, we consider some of the targets to be commercial-in-confidence, as the Scorecard is linked to strategy. Consistent since fiscal year 2010, the maximum payout for Scorecard LTI is 3.0x target LTI.
The Remuneration Committee believes that the Scorecard LTI continues to be an appropriate component of its LTI Plan because it:
•allows the Remuneration Committee to set targets for and reward executives on a balance of longer-term financial, strategic, business, customer and organizational development goals which it believes are important contributors to long-term creation of shareholder value;
•ties the reward’s value to our share price over the medium-term; and
•allows flexibility to apply rewards across different countries, while providing Senior Executive Officers with liquidity to pay tax or other material commitments at a time that coincides with vesting of shares (via the other components of the LTI Plan), as payment is in cash.
No specific weighting is applied to any single objective and the final Scorecard assessment reflects an element of judgment by the Board. The Board may only exercise negative discretion (i.e., to reduce the amount of Scorecard LTI that will ultimately vest). It cannot enhance the maximum reward that can be received.
The amount received by Senior Executive Officers is based on both our share price performance over the three-year performance period and the Senior Executive Officer’s Scorecard rating. At the start of the three-year performance period, we calculate the number of units each Senior Executive Officer could have acquired if they received a maximum payout on the Scorecard LTI at that time (based on a 20 trading-day average closing price). Depending on the Senior Executive Officer’s performance, between 0.0x and 3.0x of the Senior Executive Officer’s Scorecard LTI awards will vest at the end of the three-year performance period. Each Senior Executive Officer will receive a cash payment based on our share price at the end of the period (based on a 20 trading-day average closing price) multiplied by the number of units they could have acquired at the start of the performance period, adjusted downward in accordance with their Scorecard rating.
Further details related to the Scorecard for fiscal year 2024, including the method of measurement, historical performance against the proposed measures and the Board of Director’s expectations, were previously set out in our Remuneration Report included in our Annual Report filed in May 2023. An assessment of our Scorecard performance for fiscal years 2022-2024 is set out below. We will provide an explanation of the final assessment of performance under the Scorecard for fiscal years 2024-2026 at the conclusion of fiscal year 2026.
Scorecard LTI Vesting in Fiscal Year 2024 (for Fiscal Years 2022-2024)
After fiscal year 2024, the Remuneration Committee reviewed our performance over fiscal years 2022-2024 against the Scorecard objectives set forth in fiscal year 2022, and the contribution of individual Senior Executive Officers towards the achievement of such objectives. As a result of this evaluation, the
Remuneration Committee determined that Senior Executive Officers would receive a weighted average Scorecard rating between 1.5x and 2.75x of target with an average weighted target of 2.6x.
| Performance Metric/Results | Board Assessment for the Three-year Period | |||||||
| Organic Revenue Growth | Goal: APAC: 11%+; Europe: 6%+; NA: 11%+ Result: APAC: 11.6%; Europe: 8.7%; NA: 13.9% | APAC: Exceeds Expectations Europe: Exceeds Expectations North America: Exceptional Performance | ||||||
| High Value Product Mix | Goal: APAC: FY22 38%; FY23 42%; FY24 44%, Europe: FY22 39%; FY23 41%; FY24 43%, NA: FY22 66%; FY23 67%; FY24 68% Result: APAC: FY22 41%; FY23 44%; FY24 44%, Europe: FY22 28%; FY23 29%; FY24 36%, NA: FY22 77%; FY23 83%; FY24 77% | APAC: Exceeds Expectations Europe: Below Expectations North America: Exceeds Expectations | ||||||
| Lean - Cumulative over 3 Years (FY22-24) | Goal: APAC: US$78 million; Europe: US$63 million; NA: US$200 million Result: APAC: US$114 million; Europe: US$58 million; NA: US$259 million | APAC: Exceptional Performance Europe: Below Expectations North America: Exceptional Performance | ||||||
| EBIT Margin | Goal: APAC: 25% - 30%; Europe: 11% - 16%; NA: 25% - 30% Result: APAC: 28.0%; Europe: 9.3%; NA: 29.5% | APAC: Exceeds Expectations Europe: Below Expectations North America: Exceptional Performance | ||||||
| Zero Harm (“ZH”) | Goal: Dart rate: APAC: FY22=0.07; FY23=0.06; FY24= 0.05, Europe: FY22=0.55; FY23=0.44; FY24=0.35, NA: FY22=0.51; FY23=0.41; FY24=0.33 Empower all to be Zero Harm Leaders, Execute on critical ZH priorities. Result: Dart rate: APAC: FY22=0.08; FY23=0.00; FY24=0.47, Europe: FY22=0.48; FY23=0.47; FY24=0.29, NA: FY22=1.03; FY23=0.83; FY24=0.68 APAC and Europe completed their Safe Start programs. NA completed their 5S program. Implemented ZH critical priorities. | APAC: Below Expectations Europe: Exceeds Expectations North America: Below Expectations | ||||||
| Performance Metric/Result | Board Assessment for the Three-year Period | |||||||
| Innovation | Goal: Commercial-in-confidence metrics for products and process efficiencies. | Meets Expectations | ||||||
| People & Culture | Goal: 3-Year average turnover: APAC: <11%; Europe: <7.5%; NA: <11% Enhance leadership capabilities in key areas, Talent and Performance Management, Diversity & Inclusion. Result: 3-Year average turnover: APAC: 8.6%; Europe: 4.6%; NA: 10.8% Achieved gender diversity in Leadership and across organization. Filled three critical leadership roles in North America. Succession implemented. Implemented global system-based performance management and merit planning. Activated DEI goals at management level. | APAC: Exceeds Expectations Europe: Exceeds Expectations North America: Exceeds Expectations | ||||||
| Environmental, Social & Governance (“ESG”) | Goal: Continue to globally drive ESG reporting improvement; Receive zero negative shareholder votes across any resolution due to lack of clarity; Strengthen CDP disclosures with Task Force for Climate Change Disclosure (“TCFD”) recommendations and progress towards goals; Refresh materiality assessment; Expanded TFCD reporting. Result: Achieved all ESG deliverables and received significant positive feedback from proxy firms and investors. Undertook scenario analysis as part of TCFD analysis in FY24. CDP score increased from B- to B during FY23 as a result of expanded reporting. FY22 report showed all key targets have been met or exceeded. | Exceeds Expectations | ||||||
CHANGES TO REMUNERATION FOR FISCAL YEAR 2025
Remuneration for Fiscal Year 2025
During our May 2024 meeting, the Board, with the assistance of the Remuneration Committee and its independent remuneration advisers, undertook its annual review of our existing remuneration policies, programs and arrangements and determined to implement certain changes for fiscal year 2025.
Other Senior Executive Officer Compensation
Base pay, target STI and LTI increases in fiscal year 2024 and 2025 for the CFO and other Senior Executive Officers are as follows:
| Base Salary | Target STI | LTI Target | ||||||||||||||||||
| Name | Fiscal Year 2024 (US$) | Fiscal Year 2025 (US$) | Fiscal Year 2024 (US$) | Fiscal Year 2025 (US$) | Fiscal Year 2024 (US$) | Fiscal Year 2025 (US$) | ||||||||||||||
| A Erter | 1,038,000 | 1,090,000 | 120 | % | 130 | % | 5,320,000 | 6,100,000 | ||||||||||||
| R Wilson | 620,000 | 644,800 | 70 | % | 75 | % | 1,000,000 | 1,100,000 | ||||||||||||
| S Gadd | 672,750 | 699,660 | 70 | % | 70 | % | 1,000,000 | 1,100,000 | ||||||||||||
| R Kilcullen | 480,000 | 501,120 | 65 | % | 65 | % | 650,000 | 650,000 | ||||||||||||
| T Beastrom | 450,000 | 468,000 | 60 | % | 65 | % | 400,000 | 500,000 | ||||||||||||
Base salary increases are made in line with our annual compensation review guidelines and were adjusted as required to maintain positioning relative to market merit increase levels. STI and LTI target changes for FY25 were made for certain Senior Executive Officers to align pay closer to market median for their respective roles, as noted above.
STI Plans
For fiscal year 2025, the core plan design will continue to be the same as fiscal year 2024. Our metrics continue to align with our strategic direction and measure profitable growth primarily by using share gain metrics and profitability metrics when assessing Company performance and shareholder value creation. These metrics will continue to strengthen the connection between consistent growth and strong returns. The metrics for North America and Asia Pacific will remain the same as FY2024 with Primary Demand Growth (“PDG”) and EBIT margin. Europe will continue to be measured against three metrics - High Value Product Volume Growth, Total Net Sales Growth, and EBIT margin. The metrics are each set with a threshold, target and maximum payout scale. The metrics and scales will incentivize outstanding company performance in a volatile market; both driving profitable share gain to derive a payout within the payout scale reinforcing shareholder value creation. The maximum payout will be 3.0x of target. For fiscal year 2025, Mr Gadd will continue to be tied to the North America STI plan.
For executives with global responsibility (Messrs Erter, Kilcullen, Beastrom and Ms Wilson), their bonus will be based on global metrics of Adjusted Net Income, HardieTM Operating Systems (“HOS”) cost savings and the safety metric of “DART”. We believe these metrics properly align executives with global responsibility to be focused on profitable share gain in all three regions as well as our strategic initiatives and Zero Harm safety priority.
LTI Plan
The Remuneration Committee believes the three components of the LTI Plan continue to (i) align management objectives with shareholder interests (Relative TSR RSU component), (ii) promote the appropriate internal management behaviors related to operating efficiency and the profitability of the Company’s assets (ROCE RSU component), and (iii) emphasize strategic long-term priorities (Scorecard LTI component). As such, the fiscal year 2025 LTI Plan is consistent with the plan for fiscal year 2024 with updates to measures based on company strategy and financial targets.
The 2024 Notice of AGM will contain further details on the Relative TSR RSU and ROCE RSU grants for fiscal year 2025.
For fiscal year 2025, the Remuneration Committee has set the following seven Scorecard goals for each region (for the performance period in fiscal years 2025 to 2027) to ensure alignment with our strategic priorities:
| APAC | Europe | North America | |||||||||
| Zero Harm | •Empower all employees to be Zero Harm Leaders •Machine guarding initiatives complete •Working from heights initiatives complete •DART rate: < 0.07 | •Empower all employees to be Zero Harm Leaders •Machine guarding initiatives complete •Working from heights initiatives complete •DART Rate: < 0.43 | •Empower all employees to be Zero Harm Leaders •Machine guarding initiatives complete •Working from heights initiatives complete •DART rate: < 0.70 | ||||||||
| Profitable Share Gain | 4% | High Value Product Growth: 15% | >4% | ||||||||
| EBIT Margin | >29% | >14% | >30% | ||||||||
HardieTM Operating System (“HOS”) | •HOS Projects: Deliver projects including capacity expansion on time and on budget •HOS Savings: Incremental HOS savings in all regions totaling more than US$160 million globally across the three-year period versus FY23 baseline •Working Capital ◦FY25 – improvement of 75 million from 31 March 2023 baseline ◦FY26 – improvement of 100 million from 31 March 2023 baseline ◦FY27 - maintain the 100 million improvement over 31 March 2023 baseline | ||||||||||
| Innovation | •Commercial-in-confidence metrics for products and process efficiencies | ||||||||||
| People & Culture | •HR Technology Roadmap - NA FY25; EU and APAC FY26 - FY27 •Job Architecture implementation across all regions •Employee Engagement Survey FY25 through FY27 - Maintain participation and introduce People Leadership Score •Succession Planning and IDP (for all ELT and GSLT) •Establish JHU - Organization structure, program strategy and governance •Roll out recognition platform globally by FY26 | ||||||||||
| Environmental, Social & Governance (“ESG”) | FY25: •Progress toward ESG goals related to diversity, greenhouse gas emissions, waste and water. FY26 •Achievement of FY26 diversity goals and progress toward ESG goals related to greenhouse gas emissions, waste and water. FY27 •Progress toward ESG goals related to greenhouse gas emissions, waste and water. Diversity: •30% gender diversity in senior leadership by FY26 •25% gender diversity in management by FY26 •30% underrepresented minorities in management by FY26 (U.S. only) Greenhouse Gas Emissions: •42% absolute reduction in Scope 1+2 greenhouse gas (GHG) emissions by 2030, compared to CY21 baseline, and work towards net zero by 2050 Water: •Recycle an additional 20M cubic feet of water per year by 2030, compared to CY19 baseline Waste: •Zero manufacturing waste to landfill by 2035 | ||||||||||
OTHER EXECUTIVE COMPENSATION PRACTICES
Clawback Provisions
The Remuneration Committee has established an executive performance-based compensation clawback policy in connection with performance-based compensation paid or awarded to certain executives. The clawback policy provides that the Board may, in all appropriate circumstances, recover from any current or former executive regardless of fault, that portion of any performance-based compensation erroneously awarded: (i) based on financial information required to be reported under applicable US or Australian securities laws or applicable exchange listing standards that would not have been paid in the three completed fiscal years preceding the year(s) in which an accounting restatement is required to correct a material error; or (ii) during the previous three completed fiscal years as a result of any errors or omissions in objective, calculable performance measures contained in formal papers presented to and relied upon by the Board for purposes of determining compensation to be paid or awarded, where the absence of such errors or omissions would have resulted in there being a material negative impact on the amount of performance-based compensation paid or awarded.
The clawback policy applies to any person designated as a participant by the Board in the annual LTI Plan and applies to any compensation that is granted, earned or vested based wholly or in part upon the attainment of any financial or other objective, calculable performance measure under any incentive, bonus, retirement or equity compensation plan maintained by the Company, including, without limitation, the STI Plan and LTI Plan. Salaries, discretionary bonuses, time-based equity awards and bonuses or equity awards based on subjective, non-financial measures, including strategic or personal performance metrics, are excluded.
The excess compensation requiring recovery shall be the amount of performance-based compensation that an executive received, based on the erroneous data, less the amount that would have been paid to the executive based on the restated or corrected data. All recoverable amounts shall be calculated on a pre-tax basis. For equity awards still held at the time of the recovery, the recoverable amount shall be the amount vested in excess of the number that should have vested under the restated or corrected financial reporting measure. For vested equity awards which have already been sold, the recoverable amount shall be the sale proceeds the executive received with respect to the excess number of shares.
In addition, all fiscal year 2024, LTI grants made to Senior Executive Officers are subject to a specific clawback provision for violation of a limited non-compete provision that specifically prohibits executives from working for designated competitors or for any company that may enter the fiber cement market within two years of departure. For fiscal year 2024, all LTI grants made to Senior Executive Officers will be subject to the clawback provision.
Stock Ownership Guidelines
The Remuneration Committee believes that Senior Executive Officers should hold a meaningful level of our stock to further align their interests with those of our shareholders. In February 2023, we reviewed our guidelines and increased the multiple of base salary. For the CEO and other Senior Executive Officers, our increased guidelines require them to accumulate holdings of five times and two times their base salary, respectively, in our stock over a period of five years. In November 2023, the Remuneration Committee included the Vice Presidents (VPs) to the Stock Ownership Guidelines requiring them to accumulate holdings of one times base salary. New Senior Executive Officers and VPs will have five years from the date the executive first becomes subject to the applicable guideline. In addition, an estimated after-tax amount of time-based restricted stock units will be counted toward the guidelines. All other features of the stock ownership guidelines remain the same.
Until the stock ownership guidelines have been met, Senior Executive Officers and VPs are required to retain at least 75% of shares obtained under our LTI Plans (net of taxes and other costs). Once the executives have met or exceeded their stock ownership guidelines, they are required to retain at least 25% of shares issued under our LTI Plans through the vesting of RSUs (net of taxes and other costs) for a period of two years (by way of a holding lock), after which time those shares can be sold (provided they remain at or above the stock ownership guideline).
As of 31 March 2024, all executives have either achieved the minimum share ownership threshold or are within the initial five year accumulation period.
Equity Award Practices
The fiscal year 2025 annual equity awards under the LTI Plan were approved by the Remuneration Committee in May with awards generally issued in August of each year. We do not time the granting of equity awards to the disclosure of material information.
For details of the application of our insider-trading policy for equity award grant participants, including our prohibition on employee hedging transactions, see the “Insider Trading” section of this Annual Report.
Loans
We did not grant loans to Senior Executive Officers during fiscal year 2024. There are no loans outstanding to Senior Executive Officers.
Employment and Severance Arrangements
During fiscal year 2024, we maintained employment or severance agreements with Mr Erter and the Senior Executive Officers. Other than as provided under the terms of their respective employment agreements, no other termination payments are payable, except as required under the terms of the applicable STI or LTI plans.
Employment Agreement with Aaron Erter
Below is a summary of the key terms of Mr Erter’s employment agreement:
•The Employment Agreement is effective 1 September 2022 providing for service as CEO.
•Mr Erter is an employee-at-will and either he or the Company may terminate his employment at any time or for any reason.
•Base salary at an initial annual rate of US$1,000,000, subject to annual review and approval by the Remuneration Committee.
•Participation in the Company’s annual STI and LTI Plans, with a minimum STI target of 120% of his annual base salary, as established by the Company’s Board.
•Participation in the Company’s benefit, health and welfare plans and certain fringe benefits made generally available to Senior Executive Officers in accordance with his agreement and Company policies.
•In the event that Mr Erter’s employment is terminated by the Company for any reason other than for “Cause”, or if Mr Erter voluntarily terminates his employment for “Good Reason”, in addition to those benefits that would be considered standard for any employee at termination (i.e., unpaid base salary, accrued vacation, unreimbursed business expenses and the payment of any earned but unpaid annual incentive award) Mr Erter will be entitled to receive the following benefits:
◦An aggregate amount equal to the sum of: (i) two times Mr Erter’s base salary plus (ii) two times Mr Erter’s target annual incentive, payable in substantially equal periodic installments over the two year period following the date of termination;
◦An amount, if any, with respect to the annual incentive award opportunity for the fiscal year in which termination of employment occurs, as determined under the terms and conditions of annual incentive program(s) then in-effect;
◦All outstanding equity awards will be subject to the terms and conditions of the applicable equity incentive plan and any corresponding award agreement(s); provided, however, that the nonqualified stock options shall vest in full and become exercisable (to the extent then unvested);
◦Monthly payments for a period of up to 24 months following the date of termination equal to the premium Mr Erter would be required to pay for continuing coverage under the Company’s health benefit plans; and
◦Reasonable professional outplacement services for a period of up to 24 months following the date of termination.
Employment Agreement with Rachel Wilson
Below is a summary of the key terms of Ms Wilson’s employment agreement:
•The Employment Agreement is effective 16 August 2023 providing for service as CFO.
•Ms Wilson is an employee-at-will and either she or the Company may terminate her employment at any time or for any reason.
•Base salary at an initial annual rate of US$620,000, subject to annual review and approval by the Remuneration Committee.
•Participation in the Company’s annual STI and LTI Plans, with an STI target of 70% of her annual base salary.
•Participation in the Company’s benefit, health and welfare plans and certain fringe benefits made generally available to Senior Executive Officers in accordance with her agreement and Company policies.
Severance Agreements with Ms Wilson, and Messrs Sean Gadd, Ryan Kilcullen, and Timothy Beastrom
During fiscal year 2024, we entered into a severance agreement with Ms Wilson, and Messrs Gadd, Kilcullen and Beastrom in order to provide them with certain severance benefits under various termination scenarios. In the event of termination by the Company without cause or by the executive for good reason or death and disability, these benefits would be in addition to what would be considered standard for any employee at termination (i.e., lump sum unpaid base salary, accrued vacation, unreimbursed business expenses and the payment of any earned but unpaid annual incentive award) and would include:
•In the event that Ms Wilson, and Messrs Gadd, Kilcullen and Beastrom are terminated by the Company without “Cause” or terminated by the executive for “Good Reason”, in addition to those benefits that would be considered standard for any employee at termination (i.e., unpaid base salary, accrued vacation, unreimbursed business expenses and the payment of any earned but unpaid annual incentive award) Ms Wilson, Messrs Gadd, Kilcullen and Beastrom will be entitled to receive the following benefits:
◦Salary continuation for the 1.5 year period following the date of termination, provided the aggregate amount of such continuation payments shall be equal to the sum of (i) 1.5 times the base salary plus (ii) 1.5 times the annual incentive award opportunity, as then in-effect;
◦All outstanding equity awards under the Company’s equity incentive plans will be subject to the terms and conditions of the applicable plan and any corresponding award
agreement(s); except that performance-based awards will fully accelerate vesting at target upon termination due to death or disability and the LTI Scorecard would pay out at 1.0x of target
◦Monthly payments for a period of 1.5 years following the date of termination equal to the premium the executive would be required to pay for continuing coverage under the Company’s health benefit plans; and
◦Reasonable professional outplacement services for a period of up to 12 months following the date of termination for Messrs Gadd and Kilcullen, and for a period of up to 18 months following the date of termination for Ms Wilson and Mr Beastrom.
Severance Agreement with Mr Miele upon Separation
During fiscal year 2024, we entered into a severance agreement with Mr Miele in order to provide him with certain severance benefits upon his separation from the Company without cause. Mr Miele also continued to work on special projects from 17 August 2023 through 17 November 2023 as requested by the Company. Mr Miele’s Continued Service terms and severance agreement include:
1.Continued Service. From 16 August 2023, through 17 November 2023, you will be employed by the Company to provide services as an advisor to the Chief Executive Officer of the Company, as requested by him, for strategic or corporate projects (“Services”), at the same rate of base salary and with the same employee benefits in effect for you immediately prior to 16 August 2023. The Company and you reasonably anticipate that the level of Services provided hereunder may permanently be reduced, but in any event to no less than 21% of the services you provided to the Company during the preceding 36-month period. Notwithstanding the foregoing, the Company reserves the right to terminate your role as an advisor to the Chief Executive Officer for Cause prior to 17 November 2023, which would accelerate the Termination Date. As used herein, “Cause” means: (i) indictment for, conviction of, or plea of guilty or no contest to, a gross misdemeanor involving dishonesty or fraud or any felony, (ii) financial dishonesty, including, without limitation, misappropriation of Company funds or property, (iii) refusal to comply with reasonable directives of the Chief Executive Officer, (iv) gross negligence or willful misconduct in the performance of the Services, (v) intentional misconduct which has a material adverse effect upon or otherwise materially injures the Company’s business or reputation, or (vi) breach of any material provision of this Agreement. In addition, upon not less than five (5) days’ written notice to the Company (c/o Farhaj Majeed), you may for any reason terminate your employment as an advisor to the Chief Executive Officer before 17 November 2023, and any such termination by you which is effective before 17 November 2023 would also accelerate the Termination Date. Acceleration of the Termination Date by you, or due to the Company’s termination of your role as an advisor to the Chief Executive Officer for Cause, will not result in forfeiture or loss of the benefits set forth in Section 3, unless acceleration of the Termination Date for Cause is due to a breach by you of any material provision of this Agreement (clause 2.(vi) herein). Any acceleration of the Termination Date will affect the ending of the vesting and proration periods of the awards and incentives referenced in Sections 1.c. and 3.b. of this Agreement.
2.Severance and Other Benefits. In exchange for the releases of claims and the promises set forth herein and in the Supplemental Release, and provided you have executed this Agreement and the Supplemental Release and have not revoked either within the revocation periods provided below and in the Supplemental Release, and provided further that the Company has not accelerated the Termination Date for Cause under clause 2(vi) above due to a breach of any material provision of this Agreement, the Company will provide you with the following severance and other benefits:
a.Salary Continuation. Commencing on the first regularly scheduled payroll date that occurs immediately following the sixty-first (61st) day following the Termination Date (the “Payment Commencement Date”), the Company will provide you with a total salary continuation payment of $1,455,795, which amount is the sum of one-and-one-half times your base salary in effect as of the Termination Date plus one-and-one-half times your target annual incentive award opportunity. The total salary continuation payment shall be paid to you in equal installments, less applicable withholding taxes, according to the Company's normal payroll cycles over the eighteen (18) month period commencing with the Payment Commencement Date; provided, that the portion of the salary continuation payment that is payable on the Payment Commencement Date shall include a lump-sum amount equal to the portion of the severance amount that would have been payable commencing on the Termination Date and ending on the Payment Commencement Date.
b.FY2024 Short-Term Incentive. In recognition of your service during the FY2024 performance period and plan design, you will be eligible to participate in the FY2024 Short-Term Incentive Plan (STIP), prorated for your days of active employment during FY2024. Per plan design, you will receive the 80% Company Performance (CP) portion consistent with actual FY2024 Company Performance for "Corporate" metrics and as paid to other plan participants measured by Corporate metrics. The 20% Individual Performance (IP) portion will be paid at 100% or consistent with "Fully Performing" performance. This FY2024 STIP payment will be paid to you consistent with the Company's normal pay date in June 2024.
c.COBRA Continuation Payments. Beginning as soon as practicable following the Effective Date of the Supplemental Release, the Company shall provide you eighteen (18) monthly payments in a gross amount equal to the premium you would be required to pay for COBRA continuation coverage under the Company’s health benefits plans (i.e., medical, dental and vision coverage) determined using the COBRA premium rate in effect for the level of coverage that you have in place immediately prior to the Termination Date; provided, that you will not be required to purchase COBRA continuation coverage. These payments shall be paid to you less applicable withholding taxes.
d.Outplacement Assistance. The Company shall provide you with reasonable professional outplacement service through the provider of the Company's choice or the cash equivalent valued at $20,000.00. If you select company-provided outplacement service, such services shall terminate when you find other employment; however, in no event shall such outplacement service continue for more than twelve (12) months following your Termination Date.
REMUNERATION PAID TO SENIOR EXECUTIVE OFFICERS
Total Remuneration for Senior Executive Officers - fiscal years 2024, 2023 and 2022 are set out below:
| (US dollars) | Primary | Post- employment | Equity Awards | Other | TOTAL | ||||||||||||||||||||||||||||||||||||||||||
| Name | Base Pay1 | STI Award2 | Other Benefits3 | 401(k) | Ongoing Vesting 4 | Mark-to Market5 | Relocation Allowances, and Other Nonrecurring6 | ||||||||||||||||||||||||||||||||||||||||
A Erter7 | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 1,027,769 | 3,300,840 | 45,183 | 19,800 | 6,630,132 | 4,016,270 | — | 15,039,994 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2023 | 556,996 | 278,795 | 29,123 | 12,830 | 2,339,393 | 93,635 | 1,832,434 | 5,143,206 | |||||||||||||||||||||||||||||||||||||||
R Wilson8 | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 364,846 | 719,598 | 17,314 | 6,677 | 784,498 | 96,447 | 120,361 | 2,109,741 | |||||||||||||||||||||||||||||||||||||||
| S Gadd | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 666,625 | 1,247,951 | 64,062 | 19,800 | 3,036,708 | 3,098,560 | — | 8,133,706 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2023 | 650,000 | 182,000 | 62,333 | 18,300 | 2,758,207 | (1,123,392) | — | 2,547,448 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2022 | 597,487 | 1,403,340 | 62,027 | 17,400 | 2,443,365 | 503,632 | — | 5,027,251 | |||||||||||||||||||||||||||||||||||||||
| R Kilcullen | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 467,769 | 826,800 | 54,669 | 19,800 | 1,845,119 | 1,841,776 | — | 5,055,933 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2023 | 435,000 | 113,100 | 54,973 | 18,300 | 1,457,435 | (546,586) | — | 1,532,222 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2022 | 398,627 | 650,278 | 45,927 | 18,922 | 1,232,884 | 205,533 | — | 2,552,171 | |||||||||||||||||||||||||||||||||||||||
| T Beastrom | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 450,000 | 702,000 | 51,254 | 17,723 | 594,019 | 247,600 | 19,422 | 2,082,018 | |||||||||||||||||||||||||||||||||||||||
J Miele9 | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 446,616 | 655,786 | 33,998 | 19,311 | 1,032,559 | 1,508,412 | 355,953 | 4,052,635 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2023 | 550,000 | 154,000 | 36,229 | 18,300 | 2,054,001 | (644,967) | 329,636 | 2,497,199 | |||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2022 | 487,000 | 1,462,785 | 42,480 | 17,400 | 1,291,915 | 148,071 | — | 3,449,651 | |||||||||||||||||||||||||||||||||||||||
| TOTAL | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 3,423,625 | 7,452,975 | 266,480 | 103,111 | 13,923,035 | 10,809,065 | 495,736 | 36,474,027 | |||||||||||||||||||||||||||||||||||||||
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1Base pay for fiscal years 2024, 2023 and 2022 includes salary paid to Senior Executive Officers for the 26 bi-weekly paychecks received during the fiscal years.
2For further details on STI awards payable for fiscal year 2024 see “Incentive Arrangements” above in this Remuneration section. Amounts reflect actual STI awards to be paid in June 2024 and paid in June 2023 and 2022, for fiscal years 2024, 2023 and 2022, respectively. In fiscal year 2022, Messrs Miele and Gadd also received a bonus due to the additional work from the departure of the CEO.
3Includes the aggregate amount of all other benefits received in the year indicated. Examples of benefits that may be received include medical and life insurance benefits, car allowances, membership in executive wellness programs, and financial planning and tax services.
4Includes equity award expense for grants of Scorecard LTI awards, relative TSR RSUs, ROCE RSUs and Stock Options. Relative TSR RSUs are valued using a Monte Carlo simulation method and stock options are valued using the Black-Scholes option pricing model. ROCE RSUs and Scorecard LTI awards are valued based on the Company’s share price at each balance sheet date adjusted for the fair value of estimated dividends as well as the Remuneration Committee’s current expectation of the amount of the RSUs or awards which will vest. The fair value of equity awards granted are included in compensation over the periods in which the equity awards vest. For ROCE RSUs and Scorecard LTI awards, this amount excludes adjustments to the equity award expense in previous fiscal years resulting from changes in the Company’s share price, which is disclosed separately in the Equity Awards “Mark-to-Market” column.
5The amount included in this column is the equity award expense in relation to ROCE RSUs and Scorecard LTI awards resulting from changes in fair market value of the US dollar share price during the fiscal years 2024, 2023 and 2022 as well as adjustments to performance ratings based on review by Executive Management and the Board of Directors. During fiscal year 2024, there was an 87.7% increase in our share price from US$21.36 to US$40.11. During fiscal year 2023, there was a 29.7% decrease in our share price from US$30.38 to US$21.36. During fiscal year 2022, there was a 0.3% increase in our share price from US$30.28 to US$30.38.
6Includes the aggregate of non-recurring payments or other benefits received in the year indicated. Examples include one-time signing bonus or other limited payments connected to initial retention, one-time discretionary bonus payments, relocation allowances and costs and severance payments.
7Mr Erter’s base pay includes US$220,000 in fiscal year 2024 which is allocated for tax purposes to his services on the Company’s Board.
8For Ms Wilson, amounts reflect compensation received during fiscal year 2024 based on her start date of 16 August 2023.
9For Mr Miele, amounts reflect compensation received during fiscal year 2024 including severance payments due to his separation on 17 November 2023.
Additional Summary Remuneration Table
This table shows the compensation provided to the executive that more closely reflects the amount of pay earned during each fiscal year reported. The footnotes below the table define each compensation component. The main difference between the two tables is the equity incentives. This table shows the value of the LTI Scorecard payout (not shown in previous table) in the Non-Equity Incentive Plan Compensation column, which also includes the annual STI payout. The Stock Awards column shows the value of the fiscal years 2024-2026 equity awards that were granted to each executive.
| Name | Base Pay1 | Bonus2 | Stock Awards3 | Options Awards4 | Non-Equity Incentive Plan Compensation5 | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation6 | Total | |||||||||||||||||||||||||||||||||||||||
A Erter7 | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 1,027,769 | — | 2,659,984 | — | 4,424,565 | — | 64,983 | 8,177,301 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2023 | 556,996 | — | 2,499,965 | 1,999,996 | 278,795 | — | 1,874,387 | 7,210,139 | |||||||||||||||||||||||||||||||||||||||
| R Wilson | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 364,846 | — | 1,499,975 | — | 719,598 | — | 144,351 | 2,728,770 | |||||||||||||||||||||||||||||||||||||||
| S Gadd | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 666,625 | — | 499,988 | — | 2,474,454 | — | 83,862 | 3,724,929 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2023 | 650,000 | — | 987,480 | — | 2,301,587 | — | 80,633 | 4,019,700 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2022 | 597,487 | 400,000 | 400,003 | — | 2,349,680 | — | 79,427 | 3,826,597 | |||||||||||||||||||||||||||||||||||||||
| R Kilcullen | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 467,769 | — | 324,994 | — | 1,508,191 | — | 74,469 | 2,375,423 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2023 | 435,000 | — | 626,226 | — | 1,000,727 | — | 73,273 | 2,135,226 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2022 | 398,627 | — | 199,993 | — | 1,076,895 | — | 64,849 | 1,740,364 | |||||||||||||||||||||||||||||||||||||||
| T Beastrom | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 450,000 | — | 199,989 | — | 702,000 | — | 88,399 | 1,440,388 | |||||||||||||||||||||||||||||||||||||||
| J Miele | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal year 2024 | 446,616 | — | — | — | 1,559,771 | — | 409,261 | 2,415,648 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2023 | 550,000 | — | 844,974 | — | 937,329 | — | 384,165 | 2,716,468 | |||||||||||||||||||||||||||||||||||||||
| Fiscal year 2022 | 487,000 | 600,000 | 300,003 | — | 1,289,402 | — | 59,880 | 2,736,285 | |||||||||||||||||||||||||||||||||||||||
| TOTAL | |||||||||||||||||||||||||||||||||||||||||||||||
| Fiscal Year 2024 | 3,423,625 | — | 5,184,930 | — | 11,388,579 | — | 865,325 | 20,862,459 | |||||||||||||||||||||||||||||||||||||||
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1 Base pay for fiscal years 2024, 2023 and 2022 includes salary paid to Senior Executive Officers for the 26 bi-weekly paychecks received during the fiscal years.
2 Includes non-performance bonuses such as a special award for retention or a sign-on bonus for a new hire. Messrs Miele and Gadd received special bonuses for their work in FY22 due to the departure of the CEO in the amounts of US$600,000 and US$400,000 respectively.
3 Shows the value on the date of grant for the TSR RSUs and ROCE RSUs granted to the executive during each fiscal year. Relative TSR RSUs are valued using a Monte Carlo simulation method. ROCE RSUs are valued based on the Company’s share price on the grant date. The TSR RSU valuation for fiscal year 2024 is US$19.31 and ROCE RSU 20-day average share price of US$28.83.
4 Mr Erter was granted an award of nonqualified stock options upon hire. The stock options were granted at an exercise price of AUD33.05 and become exercisable 3 years after the grant date of 3 November 2022 with a 5 year exercise period.
5 For further details on STI awards paid for fiscal year 2024, see “Incentive Arrangements” above in this Remuneration section. Amounts reflect actual STI awards to be paid in June 2024 and paid in June 2023 and 2022, for fiscal years 2024, 2023 and 2022, respectively. In addition, the LTI Scorecard cash payouts are included that were paid in August 2023, 2022 and 2021.
6 Includes the aggregate amount of all other benefits received in the year indicated. Examples of benefits that may be received include