Investor Presentaiton

76 776 Remuneration Report Remuneration Report 2023 Table of Contents 77 Annual Report 2023 Woolworths Group Dear Shareholders, On behalf of the Board, I am pleased to present my first Remuneration Report as the Chair of the People Committee, and look forward to engaging with shareholders over the coming months. Tragically, during the year, there were two fatalities in our business, involving a team member and a contractor of Woolworths. The Board and team are deeply saddened by these events and our thoughts are with those affected. Following a number of years of COVID-related disruption, Woolworths Group delivered a strong F23 operating result. This reflected the hard work of our teams in supporting our customers and communities, and restoring the Group's operating rhythm. Our Customer Care scores remained high across the Group as the team responded with care to the escalating cost of living pressures for our customers. Our remuneration framework is based on market competitive fixed pay, a balanced scorecard for short-term incentives (STI) to drive improvement across customer, team, financial and operating performance, and a long-term incentive (LTI) that aligns pay with disciplined financial management, strengthening the Group's reputation and shareholder returns. As outlined below and reflected in actions relating to this year's STI, the Board retains discretion on all STI and LTI outcomes. F23 Reward Outcome: STI A priority for F23 has been delivering everyday value for customers facing cost of living pressures. At the same time we have demonstrated progress on our strategic agenda by delivering better E2E customer experiences, growing our B2B offer and scaling our retail platforms and Group capabilities. Particularly pleasing was the growing contribution made to the Group results by the businesses we acquired in F22. We see further growth potential through our recent acquisition of the MILKRUN brand and proposed majority acquisition of Pet Stock, which will provide more convenience to our customers. A more stable operating environment supported strong sales and EBIT performance with both measures achieving results ahead of targets set for F23. These measures were offset by Working Capital Days which was below target, reflecting intentional investment in inventory to secure supply and improve availability for customers. Whilst our Voice of Customer NPS scores remained strong in absolute terms, the results were below the threshold performance level set. These results need to be considered in the tragic context of the fatalities during the year. Keeping our team safe when they come to work is core to who we are and what we do. Investigations into both matters are ongoing. In these circumstances, the Board has determined that there should be a 10% point reduction in F23 incentive outcomes for all salaried team members aligned to the Group scorecard. The Board will consider whether any further action is appropriate as we learn more from the current investigations. Following the adjustment described above the overall scorecard result was reduced from 89.8% to 79.8% of Target (53.2% of Maximum). F23 Reward Outcome: LTI The F21-23 Woolworths Group Incentive Share Plan (WISP) achieved an aggregate outcome of 49.9% of the maximum performance rights vesting. Sales per square metre continued to perform well and Return on Funds Employed also improved in the context of a stabilising operating environment resulting in both measures achieving an outcome slightly ahead of Target. Despite a strong absolute Total Shareholder Return performance of 32.0% over the plan period, the Relative Total Shareholder Return metric was below Entry, as other companies in the comparator group benefited from cyclical market conditions. F24 Outlook After reviewing pay and fees compared to the market the Board approved some moderate increases to executive fixed remuneration and director fees for the year ahead. Details are included in this Report and increases are lower, on average, than those awarded to our teams. The Board does not intend to make any substantive changes to STI and LTI plans in F24. It is the Committee's intention to review the remuneration framework next year to test its ongoing effectiveness in supporting the Group's overall strategy. In Summary The remuneration outcomes for F23 appropriately reflect the underlying performance and collective contribution of hardworking teams who are well regarded in their industry and in the wider market. While the overall result was appropriately moderated by the impact of the workplace fatalities, Woolworths Group ends the year in a strong position. Our positive momentum will enable us to create value for shareholders and customers, committed to the safety and wellbeing of our teams and doing the best for the communities we serve. he Brenne Maxine Brenner Chair People Committee F23 Remuneration at a glance Link between performance and remuneration received What we paid executive KMP in F23 and their current shareholdings Terms of executive KMP service agreements 81 83 85 88 89 1 1.1 1.2 Alignment of remuneration framework to our strategic priorities F23 executive KMP remuneration mix 78 1.3 79 80 2 Executive KMP remuneration 2.1 Short-term incentive 2.2 Long-term incentive 2.3 2.4 2.5 F24 outlook 3 Governance 3.1 Role of the Board 3.2 Role of the People Committee (PC) 3.3 Treatment of unvested equity awards upon exit 3.4 Other governance requirements 4 4.1 4.2 4.3 5 KMP statutory disclosures 5.1 KMP remuneration 5.2 KMP share right movements 5.3 KMP share movements 5.4 Non-executive directors' arrangements Non-executive directors' remuneration policy and structure Non-executive directors' minimum shareholding requirement Non-executive directors' equity plan Share rights outstanding for executive KMP The report has been prepared and audited against the disclosure requirements of the Corporations Act 2001 (Cth). Who is covered by this report? This report outlines Woolworths Group's remuneration framework and the outcomes for the year ended 25 June 2023 for Key Management Personnel (KMP). KMP have the authority and responsibility for planning, directing and controlling the activities of Woolworths Group. F23 KMP are: Non-executive KMP POSITION NAME Scott Perkins 1 Warwick Bray 2 Chair Maxine Brenner Jennifer Carr-Smith Philip Chronican Tracey Fellows 2 Holly Kramer Kathryn Tesija Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director PEOPLE 90 90 91 92 93 93 93 94 96 97 98 1 highlights Performance 2 Business review 3 Report Directors' APPOINTED COMMITTEE 26 October 2022 1 March 2023 4 Chair 1 Brad Banducci Managing Director & CEO Amanda Bardwell 3 Managing Director, WooliesX Managing Director, Woolworths Supermarkets Chief Financial Officer Siobhan McKenna 2 Non-executive director 1 December 2020 17 May 2019 1 October 2021 1 March 2023 8 February 2016 9 May 2016 26 February 2016 26 June 2017 1 October 2020 1 August 2019 1 September 2015 to 26 October 2022 8 February 2016 to 26 October 2022 Mr Perkins was appointed as Chair following Mr Cairns' retirement from the Board on 26 October 2022. Mr Perkins was appointed to the Board on 1 September 2014. 2 Mr Bray and Ms Fellows were appointed to the Board on 1 March 2023. Ms McKenna retired from the Board on 26 October 2022. 3 Ms Bardwell became KMP on 28 June 2021. Former KMP Executive KMP Natalie Davis Stephen Harrison Gordon Cairns 1 Chair Financial Report ம Other information