Remuneration report (audited)

This Remuneration report details Telix’s remuneration policy and practice for Key Management Personnel (KMP) for the financial year ended 31 December 2023. This report has been prepared in accordance with the Corporations Act 2001 (Cth) (Corporations Act) for the Company and its controlled entities (collectively Telix, or the Group). It has been audited by Telix’s external auditor.

1 Key Management Personnel

KMP are individuals with the authority and responsibility for planning, directing and controlling the activities of the Group, either directly or indirectly. Telix’s 2023 Remuneration report covers both the Non-Executive Directors (NED) and Executive KMP noted below during 2023 and up to the date of this report:

2 Remuneration snapshot

2.1 2023 performance highlights

During 2023, under the management of the Executive KMP, Telix delivered the following performance for the Group and shareholders:

Global commercial sales (including revenue from contracts with customers)

$502.5 million 214% increase on 2022 ($160.1 million) Financial

Adjusted EBITDAR¹ $180.9 million, up from $8.2 million in 2022 Share price growth

31 December 2023 $10.08
39% increase on 2022 ($7.27) Market capitalisation

31 December 2023 $3.26 billion, 42% increase on 2022 ($2.30 billion)

2.2 2023 remuneration at target

The remuneration elements (at target) for 2023 for Executive KMP are as follows:

2.3 2023 remuneration outcomes 

In recognition of the significant contribution Executive KMP made to Telix’s performance in 2023, their remuneration outcomes are aligned with Group performance. Further details are provided throughout the Remuneration report, and summarised as follows:

As part of the CCO's appointment in December 2022, the Board approved a grant of 35,000 Sign on Performance Share Rights (PSRs) granted in 2023, with a second tranche of 35,000 to be granted in 2024. Refer to section 5.4.1 for details.

In addition, during 2023 two Executive KMP (the CFO and CCO) were identified by the Board to receive Performance Share Incentive Rights to be granted in 2024 (after the 2023 full year results announcement). Refer to section 5.4.2 for details.

Legacy equity awards that vested to Executive KMP during the year are detailed in section 7.1.4, and summarised below:

3 2023 Executive KMP remuneration overview

3.1 Remuneration principles

Attract, motivate and retain talent in Telix’s operating markets Reward corporate performance and execution of Telix's strategy Align the interests of employees with shareholders Be simple and transparent

3.2 2023 Remuneration philosophy

Telix’s Executive KMP are responsible for making and executing decisions that build Telix’s value. In setting the remuneration philosophy and design, the Board aims to balance reward for short-term results with long-term business performance and value creation. The Board’s aim is to provide clarity so that shareholders, executives, and all other stakeholders understand how remuneration at Telix helps drive the business strategy, shareholder alignment and reward outcomes.

Provide fixed and variable remuneration to attract and retain the talent required to build and execute Telix’s strategy Ensure variable remuneration is contingent on outcomes that grow and protect shareholder value Ensure a suitable proportion of remuneration is received as equity so performance is aligned with long-term shareholder interests and aids retention

3.3 2023 Remuneration framework

The 2023 remuneration framework for Executive KMP detailed in this report includes the following elements:

Other remuneration elements

To attract and retain a strong and cohesive Executive team, additional remuneration awards may be made including sign-on incentives, retention incentives and other one-off incentives, aligned to Telix’s remuneration principles and philosophy.

As part of the CCO’s appointment in December 2022, the Board approved a grant of 35,000 Sign On Performance Share Rights (PSRs) granted in 2023, and an additional tranche of 35,000 PSRs to be granted in 2024. See section 5.4.1.

During 2023, two Executive KMP (the CFO and CCO) were identified to receive Performance Share Incentive Rights (PSIRs) in 2024 (after the 2023 full year results announcement). This grant will retain and motivate these business critical individuals in the execution of Telix’s strategy and the creation of long-term sustainable value for shareholders. This is a one off grant. Refer to section 5.4.2 for further details.

3.4 Remuneration delivery

The following diagram illustrates how remuneration was delivered to Executive KMP in 2023:

3.5 Remuneration mix

The table and diagrams below reflect the remuneration elements at target from section 2.2 as a percentage of base salary and total remuneration mix for each individual Executive KMP.

As demonstrated above, the current remuneration mix is heavily weighted towards fixed pay (57 – 63% of total target remuneration). Refer to section 8.3.1 for details regarding changes to the remuneration mix to apply from 1 January 2024.

4 Remuneration governance

4.1 Governance framework

The Governance of Telix’s remuneration framework ensures that:

• the Board delegates specific responsibilities to the PCNRC which provides recommendations to the Board

• Telix’s strategic objectives, corporate governance principles, market practice and stakeholder interests are considered, and

• achievement of pre-determined financial results and strategic objectives is rewarded through sustainable means for KMP.

Further information on the Board’s role and Telix’s corporate governance policies (including the Securities Dealing Policy) can be found in Telix’s 2023 Corporate Governance Statement and on Telix’s website at: telixpharma.com/investor-centre/corporate-governance/. Telix’s Securities Dealing Policy prohibits hedging or margin lending in respect of Telix securities.

4.2 Malus and clawback

The Board in its sole discretion, may reduce, cancel in full, or seek to clawback any incentive provided to any Executive KMP, including former Executive KMP, if it determines that at any time the Executive KMP:

• acted dishonestly (including, but not limited to, misappropriating funds or deliberately concealing a transaction)

• acted or failed to act in a way that contributed to Telix making a material financial misstatement

• acted or failed to act in a way that contributed to a breach of a significant legal or regulatory requirement relevant to Telix

• acted or failed to act in a way that contributed to Telix incurring significant reputational harm, a significant unexpected financial loss, impairment charge, cost or provision

• exposed employees, the broader community or environment to excessive risks, including risks to health and safety

• breached their post-employment conditions (unless otherwise determined by the Board)

• committed a breach or non-compliance with Telix’s Code of Conduct and/or any other employee or governance related policies, and/or

• took excessive risks or contributed to or may benefit from unacceptable cultures within the Group.

5 Executive remuneration framework

5.1 Total Fixed Remuneration (TFR)

Executive KMP receive TFR in equal monthly instalments.

Refer to section 8.3.1 regarding changes to the remuneration mix that will apply from 1 January 2024.

5.2 Short-term Variable Remuneration (STVR)

Executive KMP participated in the 2023 STVR under the following terms:

5.3 Long Term Variable Remuneration (LTVR)

5.3.1 2023 LTVR Key terms

Executive KMP participated in the 2023 LTVR under the following terms:

5.3.2 2023 LTVR performance conditions

5.3.3 2024 LTVR key terms and performance conditions

Executive KMP will be eligible to participate in the 2024 LTVR under the following terms:

The performance conditions for the 2024 LTVR are as follows:

5.4 Other equity grants

5.4.1 Performance Share Rights (PSRs)

The key terms of the first tranche of the CCO’s sign on PSRs granted in 2023 are as follows:

5.4.2 Performance Share Incentive Rights (PSIRs)

The key terms of the PSIRs the Board determined to grant to the CFO and CCO in 2024 are as follows:

5.5 Executive KMP employment arrangements

All Executive KMP are employed on ongoing, permanent contracts and have notice period and cascading non-compete and non-solicit clauses in their employment agreements as summarised below:

Employment may be terminated by either the Executive or Telix on the provision of notice in the minimum period stated above. In the event of termination for cause, Telix may terminate an Executive’s employment immediately without notice.

6 Telix performance and shareholder wealth

In line with Telix’s remuneration principles and philosophy, performance measures are chosen to align Executive KMP and shareholder interests and to ensure variable remuneration is contingent on outcomes that grow and protect shareholder value.

The following table outlines Telix’s financial performance for 2019 to 2023.

7 2023 Executive KMP remuneration outcomes

The outcomes of variable remuneration for 2023 and 2022 year are summarised below:

7.1 Short Term Variable Remuneration (STVR)

7.1.1 Performance against STVR scorecard

At the commencement of each financial year the Board reviews and approves the objectives, weightings and targets for the STVR scorecard, aligned to Telix’s strategic objectives. For 2023 the scorecard aligned to three key themes:

• Financial measures

• Core objectives, and

• Extended objectives.

The following table outlines performance against the 2023 STVR scorecard measures:

7.1.2 2023 Executive KMP STVR outcomes

In addition to the STVR scorecard, the Board considers a range of quantitative and qualitative factors when determining STVR outcomes and may apply its informed judgement and discretion to adjust STVR outcomes to ensure they are fair, appropriate, and aligned to Telix’s overall performance and shareholder outcomes.

The Board considers how performance outcomes are achieved in line with Telix’s Code of Conduct and corporate values (refer section 4.2).

For 2023 the Board assessed the STVR scorecard alongside these factors and approved STVR outcomes of 79% of target/maximum for all Executive KMP, as follows:

7.1.3 2023 Executive KMP LTVR vesting outcomes

No LTVR awards were performance tested or vested in 2023. The first LTVR award will be performance tested at the end of 2024 and will be disclosed in the 2024 Remuneration report.

7.1.4 Other equity held by Executive KMP during 2023 

Other equity awards for individual Executive KMP that vested during 2023 are detailed in section 2.3.

The following plans vested during 2023 or remain in the performance period for current Executive KMP:

8 Key events impacting remuneration

8.1 Executive KMP resignation and appointment

Dr Colin Hayward resigned as Chief Medical Officer (and Executive KMP) effective 31 December 2023. Section 10 and relevant footnotes provide further detail regarding the remuneration he received for the year ended 31 December 2023.

Effective 1 January 2024, Dr David Cade was appointed to the role of Chief Medical Officer (and Executive KMP) and will be included in the 2024 Remuneration report.

8.2 Appointment of Remuneration Consultant

During 2023, the PCNRC through the Chairman engaged Mercer Consulting (Australia) Pty Ltd (Mercer) to conduct a market analysis and review of Telix’s Executive Remuneration structure and quantum compared to selected peers based on market capitalisation and industry.

Mercer provided a remuneration recommendation as defined in section 9B of the Corporations Act in 2023 as part of their review of Telix’s MD & CEO, and Other Executive KMP remuneration. The Board is satisfied that the remuneration recommendation and other advice provided by Mercer during 2023 was provided free from undue influence from the Executive KMP to whom the recommendation relates.

Mercer also provided benchmarking data, but no remuneration recommendation, relating to Telix’s NED fees and aggregate fee limit. Further details are provided regarding the NED review and the Board's proposed response in section 9.2.2.

Total fees payable to Mercer during 2023, excluding GST and disbursements were $110,605, comprising $27,500 in relation to the Executive KMP remuneration recommendation and $83,105 in relation to other remuneration related benchmarking services provided by Mercer (excluding Executive KMP) during 2023.

8.3 Remuneration framework for 2024

8.3.1 Remuneration mix and delivery to implement Remuneration Consultant recommendations

In line with the commitment to increase fixed remuneration over time to align to the median (50^th percentile) of the market, in 2024 the Board will implement year one of the recommended changes to Executive KMP remuneration made by Mercer, including TFR increases.

In addition, as shown in section 3.5, Mercer found that Telix’s Executive KMP remuneration is heavily weighted to TFR compared to the market benchmark. The implementation of the first year of recommended changes will address the first step of progressive change and alter Telix’s remuneration mix to increase the weighting of variable pay components (STVR and LTVR). This change will also better align with shareholder interests by increasing the proportion of variable performance-based remuneration and level of shareholding held by Executive KMP.

As shown in the below table and diagrams, the remuneration mix has changed from 2023 (see section 3.5) such that the fixed pay component of total remuneration at target for the MD & CEO will reduce from 57% to 40%, and Other Executive KMP will reduce from 58-63% to 53-54%:

In addition to these changes to Executive KMP remuneration, as detailed in section 9.2.2, if the aggregate NED fee limit resolution is passed by shareholders at the 2024 Annual General Meeting, Board and Committee fees will also be increased to align to the market median over time.

8.3.2 2024 STVR changes

The Board has determined that from 1 January 2024, a proportion of Executive KMP STVR outcomes will be subject to deferral into equity. The Board has adopted Deferred Share Rights to align overall reward outcomes with value creation for shareholders, act as a retention tool and increase the shareholdings of Executive KMP.

The Deferred Share Rights will be restricted from dealing for 12 months from grant. The non-deferred portion of the STVR award will be made in cash following the release of the applicable end of year results (generally in February the following year).

The introduction of equity deferral for STVR will occur over two years as follows:

• for the first year (2024) 25% of the STVR outcome will be granted as deferred share rights restricted for 12 months to approximately February 2026, with the remaining 75% of the STVR outcome paid in cash in February 2025, and

• in the second year (2025) 50% of the STVR outcome will be granted as deferred share rights restricted for 12 months to approximately February 2027, with the remaining 50% of the STVR outcome paid in cash in February 2026.

All information regarding the Deferred Share Rights and 2024 outcomes will be fully detailed in the 2024 Remuneration report. Any Deferred Share Rights proposed to be granted to the MD & CEO will be subject to shareholder approval and will be included as a shareholder resolution at the 2025 Annual General Meeting as required.

9 Non-Executive Director (NED) remuneration

9.1 NED remuneration framework

To ensure Telix attracts and retains suitably qualified individuals, NED fees are set to reflect the obligations, responsibilities and demands of Directors. They are reviewed periodically by the Board, considering market benchmark data and the financial position of the Group. NEDs receive fees as a Director of Telix, and for their membership and chairing of applicable Board Committees. NEDs do not receive any performance-based remuneration. No equity grants were made to NEDs in 2023.

As an Australian headquartered business, overseas-based NEDs may be required to undertake additional travel to attend meetings or other Board-related matters in Australia. Effective 1 January 2023, a travel allowance of $10,000 was put in place for internationally based NEDs who travel to and from Australia to attend two Board and/or Committee meetings or other Board-related matters during the year. The allowance is in addition to the reimbursement of travel costs.

There is currently no minimum shareholding requirement for NEDs or retirement benefit scheme (other than statutory superannuation contributions for Australia-based NEDs, which are paid in addition to fees).

9.2 NED remuneration approach

The NED aggregate fee limit of $700,000 per annum was approved by shareholders at the 2021 Annual General Meeting. Total NED remuneration paid during 2023 was $584,541, within the fee limit (83.5% of the fee pool).

With the growth of Telix in the last three years, this limit was reviewed during 2023. The Board will seek to increase the aggregate fee level for NEDs from $700,000 to $1,350,000 via shareholder resolution at the 2024 Annual General Meeting. If the fee pool increase is approved by shareholders, the Board will increase NED fees to align with the benchmarking data provided by Mercer in 2023 with the remuneration changes effective from 1 January 2024. Further details are provided in section 9.2.2.

9.2.1 2023 Board and Committee fees

NEDs receive a base fee for being a Director of the Board, and additional annual fees for membership or chairing of applicable Committees as outlined below. These amounts exclude superannuation or other relevant statutory requirements, as applicable. The Chairman of the Board is not compensated for Committee Membership but is compensated for his role as Chair of the PCNRC.

Committee and Board fees were set effective 1 January 2022, and applied in 2023 as follows:

No NED equity vested in 2023.

9.2.2 2024 Board and Committee fees

Alongside the review of the aggregate fee limit detailed in section 9.2, the Board also reviewed NED remuneration (Board and Committee fees) during 2023 utilising market analysis prepared by Mercer, as mentioned in section 8.2.

The Mercer review found that Telix's 2023 Board and Committee fees (and aggregate fee pool) are well below remuneration market benchmarks based on market capitalisation and industry. The findings of Mercer's benchmarking review confirmed that Telix’s NED remuneration is placed below or at the 25th percentile (P25) and significantly below the market median (P50) of the market benchmark. In order to attract and retain suitably qualified NEDs and deliver on Telix's strategy, the Board plans to adopt the approach (not a recommendation) provided by Mercer to achieve NED remuneration aligned to P50 over time, aligned to the approach for Executive KMP.

To address the increase in NED remuneration, shareholder approval is first required to increase the aggregate fee pool. If the aggregate fee limit resolution is passed at the 2024 AGM, the Board will increase Director and Committee fees effective 1 January 2024 as follows:

Where the proposed NED fees are increased, the travel allowance detailed in section 9.1 will no longer apply.

9.3 2023 Statutory remuneration - NEDs

The table below sets out NED remuneration for 2023 and 2022, prepared in accordance with relevant IFRS and Australian Accounting Standards.

10 2023 Statutory remuneration – Executive KMP

The below table shows details of the remuneration expenses recognised for Executive KMP for 2023 and 2022 prepared in accordance with IFRS and Australian Accounting Standards.

11 Additional statutory disclosures

11.1 Ordinary shareholdings

The relevant interests of KMP in the shares issued by Telix, held directly, indirectly or beneficially either personally or by their related parties are included in this section.

11.1.1 NED ordinary shareholdings

11.1.2 Executive KMP ordinary shareholdings

11.2 KMP option holdings for the year ended 31 December 2023

11.2.1 NED option holdings

11.2.2 Executive KMP option holdings

11.3 Related party transactions with KMP

Remuneration: Remuneration to KMP is recorded in the tables above.

Loans: There were no loans between the Group and any KMP in the years ended 31 December 2023 and 2022.

Other transactions: Refer to note 33.2 of the Financial report for further details.

Other than those noted above, there were no related party transactions with any KMP in the year ended 31 December 2023.

This Directors’ report is approved in accordance with a resolution of the Directors.

H Kevin McCann AO Chairman		Christian Behrenbruch Managing Director and Group CEO
22 February 2024		22 February 2024

1. Adjusted Earnings Before Interest, Tax, Depreciation, Amortisation and Research and Development Expense