Bank of Queensland Chairman Neil Roberts today announced that the Board had come to an agreement with Managing Director David Liddy to extend his contract to August 31, 2009.
Mr Liddy's current term was due to expire on April 8, 2006. The extension is subject to shareholders approving a new long term equity incentive package as part of Mr Liddy's remuneration.
“I am delighted that we have been able to secure David’s continued leadership of Bank of Queensland,” Mr Roberts said today. “This is great news for our shareholders who have benefited under David’s leadership.
“As today’s full year results highlight, David has presided over a period of exceptional, and profitable, growth at Bank of Queensland, and the Board wishes to ensure that the strategic management introduced under David’s stewardship is embedded for the future.
“Since David’s appointment as Managing Director in 2001, Bank of Queensland has more than doubled its profit, its market capitalisation and its new home lending market share in Queensland.
“The Board has decided to ensure David is in place to manage future growth as Bank of Queensland expands interstate and builds on the gains its has made in the last three years,” he said.
Details of the new remuneration package are as follows:
- a base salary of $800,000 per annum, subject to annual review;
- a short term (annual) cash performance incentive of up to 100% of salary, subject to achievement of agreed performance indicators set in each year; and
- subject to shareholder approval, a long term equity performance incentive spread over the new five year term in the form of 2,000,000 options to subscribe for ordinary shares.
If approved, 1 million options will be issued in December 2004 with 500,000 to be issued in each of November 2005 and 2006. The Board has adopted a cash earnings per share (EPS) growth performance hurdle for the first tranche of the Managing Director's proposed new options. This test requires the Bank to outperform the average cash EPS growth of a group of peer banks over 3 years with a retest after 4 and 5 years. Options vest in part over a range of targets with 100% vesting if the Bank's EPS growth exceeds the peer group average by 20% or more.
The Board has carefully considered market practice among comparable companies listed on the ASX and decided that growth in cash EPS on a diluted basis is a more appropriate measure of senior management performance in delivering the Bank's growth strategy.
Full details, which were yesterday approved by the Bank of Queensland Board, will be included with the Notice of Annual General Meeting, which will be sent to shareholders on 9 November 2004.