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20-F
MESOBLAST LTD filed this Form 20-F on 08/31/2018
Entire Document
 

What is the relationship between our performance and allocation of options?

 

Equity-based remuneration is an integral part of remuneration in the biotechnology industry as they reward share price growth and seek to conserve cash. With the executive milestone vesting framework, executives must achieve their objectives, to the satisfaction of the Board, for the Options to vest.  Once vested, the value of the remuneration fluctuates with our share price with a floor price of that of which the option was issued. The Board believes that share price growth is an appropriate measure of success as it is the prime driver of investment in the biotechnology sector, and is simply and clearly rewarded using equity-based remuneration. In the financial year ended June 30, 2018, executive LTI grants were awarded to maintain performance-based remuneration.

 

 

 

What is the maximum number of options that may be granted to a participant in the ESOP?

 

The maximum number of options that may be granted to each participant is determined by the Board, subject to applicable legal thresholds.

 

 

 

When do the options vest?

 

For executive participants with milestone vesting grants, the Board designs the relevant performance criteria with reference to objectives which can be reasonably forecast and set given the dynamic nature of Mesoblast’s business and which will result in shareholder value creation. The Board has authority to designate that options have vested when the related milestone has been met.

For other participants, options typically vest in three equal tranches, one year, two years and three years after the date of grant, provided performance conditions are met.

 

 

 

How are the shares provided to participants under the ESOP?

 

Shares are issued to the participant upon the holder exercising their option and paying the exercise price to us (once all vesting conditions are satisfied).

 

 

 

Is the benefit of participation in the ESOP affected by changes in the share prices?

 

Yes, the value participants receive through participation in the ESOP will be reduced if the share price falls during the performance period and will increase if the share price rises over the performance period.

Non-Executive Director (“NED”) Remuneration

Our aim is to establish a board of directors comprised of global expertise in the biopharmaceutical industry and capital markets.  At the commencement of the year we had six NEDs, three based in Australia, one in the United States, one in Switzerland and one in Israel. During the year Mr Ben-Zion Weiner resigned from the Board. Mr Weiner is based in Israel. Effective from June 18, 2018, Mr Joseph Swedish based in the United States joined the Board as a NED. Subsequent to the year-end Ms Shawn Cline Tomasello also joined our Board as a NED.

Our NED fees are based on the responsibilities and work involved with directing a company of Mesoblast’s technological and geographical complexity, our financial position, regulatory and compliance context, and market practice.

NED Fees and Other Benefits

NEDs receive fixed fees for their services, as approved by shareholders at the 2013 Annual General Meeting, not to exceed a maximum fee pool of A$1,250,000. A board and committee fee structure was adopted on November 1, 2013 based on advice provided by Towers Watson in October 2012 with reference to companies of comparable size and complexity.

In consideration of our lower market capitalization at June 30, 2016, and with a goal of conserving cash, NEDs proposed that a reduced fee structure take effect from July 1, 2016. Under this revised fee structure the Board Chair fee was reduced to AUD $250,000 per annum and committee fees were suspended for all other NEDs. This fee structure remains in place with the exception that fees for the chair of both the Audit and Risk and the Nomination and Remuneration Committees were reinstated as of January 1, 2018. The fees were reinstated to reflect the time commitment and workloads of these respective positions. We also note that the fees were reinstated at 50% of their FY16 levels.

 

 

 

From July 1, 2017 to June 30, 2018

 

Position

 

Board of

Directors

 

Audit and Risk

Committee

 

 

Nomination and

Remuneration

Committee

 

Chair

 

A$250,000

 

A$12,500

 

 

A$12,500

 

Vice Chair

 

A$175,000

 

 

 

 

 

 

Member

 

A$128,250

 

 

 

 

 

 

108

 



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