Employee share ownership plans (Tables)

The table below provides a description of each of the plans.

The CDP was implemented in FY2020 as a replacement of the STIP, both of which are

generally plans for Executive KMP and the Executive Leadership Team who are not Executive KMP. GSTIP is a plan for BHP senior management who are not KMP.

Under the CDP, two thirds of the value of a participant’s short-term incentive amount is awarded as rights to receive BHP Group Limited or BHP Group Plc shares at the end of the vesting period (and the remaining one third is delivered in cash). Two awards of deferred shares are granted, each of the equivalent value to the cash award, vesting in two and five years respectively.

Under STIP and GSTIP, half of the value of a participant’s short-term incentive amount is awarded as rights to receive BHP Group Limited or BHP Group Plc shares at the end of the two-year vesting period.

The LTIP is a plan for Executive KMP and awards are granted annually.

The MAP is a plan for BHP senior management who are not KMP. The number of share rights awarded is determined by a participant’s role and grade.

CDP: Service conditions and performance conditions for the awards of five-year deferred shares only. Vesting of the five-year award is subject to a satisfactory performance underpin which encompasses a holistic review of performance at the end of the five-year vesting period, including a five-year view on HSEC performance, profitability, cash flow, balance sheet health, returns to shareholders, corporate governance and conduct.

STIP and GSTIP: Service conditions only.

LTIP: Service and performance conditions.

BHP’s Total Shareholder Return (TSR)

(1)

performance relative to the Peer Group TSR over a five-year performance period determines the vesting of 67 per cent of the awards, while performance relative to the Index TSR (being the index value where the comparator group is a market index) determines the vesting of 33 per cent of the awards. For the awards to vest in full, BHP’s TSR must exceed the Peer Group TSR and Index TSR (if applicable) by a specified percentage per year, determined for each grant by the Remuneration Committee. From the establishment of the LTIP in 2004 until the awards granted in December 2016, this percentage was set at 5.5 per cent per year.

For awards granted from December 2017 onwards, 25 per cent of the award will vest where BHP’s TSR is equal to the median TSR of the relevant comparator group(s), as measured over the performance period. Where TSR is below the median, awards will not vest. Vesting occurs on a sliding scale when BHP’s TSR measured over the performance period is between the median TSR of the relevant comparator group(s) up to a nominated level of TSR outperformance over the relevant comparator group(s), as determined by the Committee, above which 100 per cent of the award will vest.

MAP: Service conditions only.

Service conditions only.

CDP – 2 and 5 years

STIP and GSTIP – 2 years

MAP – 1 to 5 years

Dividend Equivalent Payment

BHP’s TSR is the weighted average of the TSRs of BHP Group Limited and BHP Group Plc.

Employee share awards

Number of
awards
issued
during the
year

Number of
awards
vested and
exercised

Number of
awards
lapsed

Number of
awards
at the end

Number of
awards
vested and
exercisable
at the end
of the
financial
year

Weighted
average
remaining
contractual
life (years)

Weighted
average
share
price at
exercise
date

Transitional Executive KMP awards

(1)

Awards were granted to new Executive KMP to bridge the gap created by the different timeframes of the vesting of MAP awards, granted in their non-KMP roles, and LTIP awards, granted to Executive KMP. Awards were last granted in FY2016. All awards had vested or lapsed at 30 June 2020.

Fair value and assumptions in the calculation of fair value for awards issued

Weighted

average fair

value of

awards
granted
during the
year US$

Risk-free

interest

rate

Estimated
life of
awards

price at
grant

date

Estimated

volatility

of share

price

Includes MAP awards granted on 25 September 2019 and 20 November 2019.