TIDMDGE

RNS Number : 5326O

Diageo PLC

10 February 2021

Diageo plc

LEI: 213800ZVIELEA55JMJ32

Performance measures and targets for 2020 Long-Term Incentive Plan awards

As disclosed in the Annual Report for the year ended 30 June 2020, and RNS 0779Y issued on 4 September 2020, awards of performance shares and share options were granted to participants on 3 September 2020, in accordance with the Rules of the Diageo 2014 Long Term Incentive Plan (DLTIP). These awards will vest on 3 September 2023, subject to the achievement of the performance conditions, as measured over the three-year period to 30 June 2023.

Due to the uncertainty created by the Covid-19 pandemic, and as noted in the Annual Report for the year ended 30 June 2020, the Remuneration Committee of the Board of Diageo plc decided to set targets for these awards after the reporting of interim results for 1 July 2020 to 31 December 2020. Accordingly, the threshold, midpoint and maximum targets for each of the performance measures disclosed in the Annual Report(1) are detailed below.

This disclosure should be considered in the context of remuneration only and should not be construed as performance guidance.

2020 DLTIP Awards

 
 Performance over the period          Weighting   Threshold   Midpoint     Maximum 
  1 July 2020 - 30 June 2023 
 Performance shares 
                                     ----------  ----------  ----------  ---------- 
 Organic Net Sales Value 
  growth (CAGR)                          40%         4%          6%          8% 
                                     ----------  ----------  ----------  ---------- 
 Organic Profit Before Exceptional 
  items and Tax growth (CAGR)(1)         40%        4.5%        8.25%        12% 
                                     ----------  ----------  ----------  ---------- 
 Environmental, Social and               20%          -           -           - 
  Governance (ESG)(2) , comprising 
  five measures as below: 
                                     ----------  ----------  ----------  ---------- 
            Reduction in greenhouse 
                      gas emissions          5%        6.3%       10.3%       14.3% 
                                     ----------  ----------  ----------  ---------- 
    Improvement in water efficiency          5%        5.8%        8.5%       11.2% 
                                     ----------  ----------  ----------  ---------- 
      Number of people with changed 
           attitudes on the dangers 
     of underage drinking following 
            participation in Diageo 
     supported education programmes          5%       0.75m          1m       1.25m 
                                     ----------  ----------  ----------  ---------- 
          % female leaders globally        2.5%         41%         42%         43% 
                                     ----------  ----------  ----------  ---------- 
       % ethnically diverse leaders 
                           globally        2.5%         38%         39%         40% 
                                     ----------  ----------  ----------  ---------- 
 Share Options 
                                     ----------  ----------  ----------  ---------- 
 Cumulative Free Cash Flow               50%      GBP6,200m   GBP7,200m   GBP8,200m 
                                     ----------  ----------  ----------  ---------- 
 Relative Total Shareholder              50%      9(th) and       -       3(rd) and 
  Return                                            above                   above 
                                     ----------  ----------  ----------  ----------

(1) Due to ongoing corporate tax uncertainties, the Remuneration Committee has decided to retain the PBET measure, as detailed above, which has been in place under the long-term incentive plan since 2017. The Annual Report for the year ended 30 June 2020 disclosed a change from this measure to Earnings Per Share (EPS).

(2) The ESG measures and targets are consistent with the pillars of our 'Society 2030: Spirit of Progress' plan published in November 2020.

Consistent with the approach taken in previous years, 20% of the award will vest for achieving threshold performance and 100% of the award will vest for achieving the maximum level of performance. There will be straight-line vesting between threshold and maximum for each measure, with the exception of relative total shareholder return, where the vesting schedule between threshold and maximum is stepped for each ranking compared to peers, as disclosed in the Annual Report for the year ended 30 June 2020.

James Edmunds

Deputy Company Secretary

10 February 2021

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