Long Term Variable Remuneration Plans

Fisher & Paykel Healthcare maintains a variety of short-term and long-term remuneration plans designed to attract, motivate and retain high-quality employees who will enable the company to achieve its short and long-term objectives. The company's remuneration policy includes providing discretionary variable remuneration plans which allow executives to share in the long-term success of the company. The company’s share option and performance share rights plans are intended to encourage the retention of senior management and increase the commonality between the interests of management and shareholders.
 
The remuneration packages of senior management consist of a mixture of a base remuneration package, a variable remuneration component based on relevant performance measures, participation in the company's employee share purchase plan, share option plan and performance share rights plan, and a potential company-wide profit-sharing payment. A summary of the company's share option plan, performance share rights plan, employee share rights plan, employee share purchase plans and employee stock purchase plan is set out below.

Fisher & Paykel Healthcare 2025 Share Option Plan

Options are granted to selected senior employees pursuant to the share option plan. One option gives the employee the right to subscribe for one ordinary share in the company subject to meeting the vesting conditions. 

The provisions as to vesting are as follows:

• On the third anniversary of the grant of the options, the options held by each holder are each notionally divided into two equal parts, called the “DJSMDQT Tranche” and the “ASX 200 Tranche”.  
• The company determines the total shareholder return (TSR) on the company’s ordinary shares over the three-year period from the grant of the options to the third anniversary. That is made up of the change in share price on the NZX over that period and the impact of dividends over that period.
• The TSR is then compared to the change over the same period in:
  • DJSMDQT Tranche: the Dow Jones US Select Medical Equipment Total Return Index; and
  • ASX 200 Tranche: the S&P/ASX 200 Gross Total Return Index.
• The number (if any) of options that vest is determined in accordance with the table below:

• For the purposes of the calculations above:

• share prices and index figures on a particular date are determined by reference to the average prices or index figures over the five trading days before that date;
• the returns on the DJSMDQT Index and ASX 200 Index are converted to NZ dollars using spot exchange rates.
  
  

The Board is given discretion to adjust the terms of the option if a takeover or other change of control transaction occurs in respect of the company, so as to allow option holders to participate in the benefit of that transaction. If a holder commits an act of serious misconduct as an employee or is knowingly involved in a material overstatement of financial performance or position in the group’s accounts, the Board is also given discretion to cancel the holder’s options and require repayment of any gain made from the options.
 
Unless otherwise determined by the Board, options will lapse if the holder ceases to be employed by the company for reasons other than death, serious illness, accident, permanent disablement or redundancy.

Fisher & Paykel Healthcare 2025 Performance Share Rights Plan

Performance share rights (PSRs) are granted to selected senior employees pursuant to the performance share rights plan. One share right gives the employee the potential to exercise that performance share right for one ordinary share in the company at no cost subject to meeting the vesting conditions.

The provisions as to vesting are as follows:

• On the third anniversary of the grant of PSRs, the PSRs held by each holder are each notionally divided into two equal parts, called the “DJSMDQT Tranche” and the “ASX 200 Tranche”.  
• The company determines the total shareholder return (TSR) on the company’s ordinary shares over the three-year period from the grant of PSRs to the third anniversary. That is made up of the change in share price on the NZX over that period and the impact of dividends over that period.
• The TSR is then compared to the change over the same period in:
  • DJSMDQT Tranche: the Dow Jones US Select Medical Equipment Total Return Index; and
  • ASX 200 Tranche: the S&P/ASX 200 Gross Total Return Index.
• The number (if any) of PSRs that vest is determined in accordance with the table below:

• For the purposes of the calculations above:

• share prices and index figures on a particular date are determined by reference to the average prices or index figures over the five trading days before that date;
• the returns on the DJSMDQT Index and ASX 200 Index are converted to NZ dollars using spot exchange rates.
  
  

The Board is given discretion to adjust the terms of the PSRs if a takeover or other change of control transaction occurs in respect of the company, so as to allow PSR holders to participate in the benefit of that transaction. If a holder commits an act of serious misconduct as an employee or is knowingly involved in a material overstatement of financial performance or position in the group’s accounts, the Board is also given discretion to cancel the holder’s PSRs and require repayment of any gain made from the PSRs. 

Unless otherwise determined by the Board, PSRs will lapse if the holder ceases to be employed for reasons other than death, serious illness, accident, permanent disablement or redundancy.
 

Fisher & Paykel Healthcare Employee Share Rights Plan

Employee share rights (ESRs) are granted to selected employees pursuant to the Employee Share Rights Plan. Each ESR granted under the Employee Share Rights Plan entitles the employee to be issued or transferred one ordinary share in the company, at no cost. ESRs automatically vest after three years, provided the holder remains employed by the company. All ESRs will vest at this point and shares will then be transferred to the holder. There is no cost to the holder when the ESRs vest.
 
The Board is given discretion to adjust the terms of the ESRs if a takeover or similar transaction occurs in respect of the company.

New Zealand and Australian Employee Share Purchase Plans

Shares are issued at a discount of up to 50% of market price (to a maximum discount of $500), on terms permitted by the plans in accordance with the relevant provisions of the New Zealand Income Tax Act 2007 and the Income Tax Assessment Act 1936 of Australia respectively, with no interest being charged on the loans. All New Zealand and Australian full-time employees and some part-time employees are eligible to participate after a qualifying period of employment.
 
The holding period between grant and vesting date is three years. Dividends paid during the holding period on shares allocated to employees under the plans are paid to the employees. Employee participants are not able to deal in their allocated shares during the holding period and do not have voting rights during this period.
 
Once vested, an employee participant may elect to transfer the shares into their own name, after which the shares are freely transferable. All shares are allocated to employees at the time of issue, on the condition that should they leave employment before the holding period ends, their shares will be repurchased by the Trustees at the lesser of market price and the price at which the shares were originally allocated to the employee, subject to repayment of the original loan. Different provisions apply if an employee leaves employment by reason of death, accident, sickness, redundancy, or retirement at normal retiring age.
  

North American Employee Stock Purchase Plan

Shares are issued at a discount of 15% being the lower of the market price at the date of issue or the market price at the beginning of the annual offering period in accordance with Section 423 of the US Internal Revenue Code, as amended. All North American employees working more than 20 hours per week are eligible after a qualifying period. Employees make regular payroll contributions to the plan with shares being issued to employees quarterly to the value of their accumulated contributions to the plan.
 
All shares are allocated to employees at the time of issue and vest immediately.
 
 
Information updated on 10 July 2025.