Employee share ownership plans (Tables)
 12 Months Ended
Jun. 30, 2021
Text block [abstract]  
Summary of Description of Plans
The table below provides a description of each of the plans.
 
Plan
  
CDP and STIP
  
LTIP and MAP
  
Transitional and
Commencement KMP
awards
  
Shareplus
Type
   Short-term incentive   Long-term incentive   Long-term incentive   All-employee share purchase plan
 
 
 
 
 
 
 
 
 
Overview
 
The CDP was implemented in FY2020 as a replacement for the STIP, both of which are generally plans for Executive KMP and members of the Executive Leadership Team who are not Executive 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, 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 members of the Executive Leadership Team who are not 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.
 
Awards may be granted to new Executive KMP recruited into or within the Group to bridge the time-based gap between the vesting of awards either granted in their non-KMP roles or to replace awards foregone from a previous company.
 
Employees
 may contribute
up
 
to
 US$5,000 to acqui
r
e
s
hares in any plan year. On
the third anniversary of the
start of a plan year
, the
Group will match the
number of acquired shares.
 
  
 
  
 
  
 
  
 
 
 
 
 
  
Vesting conditions
  
CDP: Service conditions only for the two-year award. Vesting of the five-year award is subject to service conditions and also to 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: 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 and performance conditions. The Remuneration Committee has absolute discretion to determine if the performance condition has been met and whether any, all or part of the award will vest (or otherwise lapse), having regard to personal performance and the underlying financial performance of the Group during the performance period. To the extent the performance condition is not achieved, awards will lapse. There is no retesting of the performance condition. Vested awards may be subject to a holding lock.   Service conditions only.
 
  
 
  
 
  
 
  
 
         
Vesting period
  
CDP – 2 and 5 years
 
STIP – 2 years
  
LTIP – 5 years
 
MAP – 1 to 5 years
  
2 years
   3 years
 
  
 
  
 
  
 
  
 
         
Dividend Equivalent Payment
  
CDP – Yes
 
STIP – Yes
  
LTIP – Yes
 
MAP – Varies
  
Yes
   No
 
  
 
  
 
  
 
  
 
         
Exercise period
   None   None   None   None
 
(1)
 
BHP’s TSR is the weighted average of the TSRs of BHP Group Limited and BHP Group Plc.
Summary of Employee Share Awards
Employee share awards
 
2021
  
Number of
awards

at the
beginning
of the
financial
year
    
Number of
awards
issued
during the
year
    
Number of
awards
vested and
exercised
    
Number of
awards
lapsed
    
Number of
awards

at the end
of the
financial
year
    
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
  
BHP Group Limited
                                                                
CDP awards
  
 
–
 
  
 
276,944
 
  
 
–
 
  
 
60,604
 
  
 
216,340
 
  
 
–
 
  
 
2.2
 
  
 
–
 
STIP awards
  
 
377,140
 
  
 
74,796
 
  
 
251,148
 
  
 
3
 
  
 
200,785
 
  
 
–
 
  
 
0.5
 
  
 
A$39.06
 
GSTIP awards
(1)
  
 
12,041
 
  
 
–
 
  
 
12,041
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
–
 
  
 
A$39.06
 
LTIP awards
  
 
4,937,506
 
  
 
654,790
 
  
 
653,170
 
  
 
1,395,906
 
  
 
3,543,220
 
  
 
–
 
  
 
1.6
 
  
 
A$39.06
 
MAP awards
    
11,159,990
      
3,502,112
      
4,161,573
      
547,012
      
9,953,517
      
51,247
      
1.2
    
 
A$39.16
 
Transitional and Commencement KMP awards
  
 
–
 
  
 
77,000
 
  
 
–
 
  
 
–
 
  
 
77,000
 
  
 
–
 
  
 
1.2
 
  
 
–
 
Shareplus
  
 
4,057,382
 
  
 
2,536,374
 
  
 
1,694,880
 
  
 
359,682
 
  
 
4,539,194
 
  
 
–
 
  
 
1.3
 
  
 
A$45.49
 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
BHP Group Plc
                                                                
MAP awards
  
 
218,403
 
  
 
82,404
 
  
 
70,569
 
  
 
54,189
 
  
 
176,049
 
  
 
–
 
  
 
1.1
 
  
 
£17.89
 
Shareplus
  
 
229,462
 
  
 
125,493
 
  
 
103,128
 
  
 
19,060
 
  
 
232,767
 
  
 
–
 
  
 
1.3
 
  
 
£20.57
 
 
(1)
 
Short-term incentive awards that were granted to BHP senior management who were not KMP. Awards were last granted in FY2018. All awards had vested or lapsed at 30 June 2021.
Summary of Fair Value and Assumptions in the Calculation of Fair Value for Awards Issued
Fair value and assumptions in the calculation of fair value for awards issued
 
2021
  
Weighted
average fair
value of
awards
granted
during the
year US$
    
Risk-free

interest
rate
    
Estimated
life of
awards
    
Share price at grant date
    
Estimated
volatility
of share
price
    
Dividend
yield
  
BHP Group Limited
                                                
CDP awards
  
 
25.28
 
  
 
n/a
 
  
 
2 and 5
years
 
 
    
A$35.90
    
 
n/a
 
  
 
n/a
 
STIP awards
  
 
25.28
 
  
 
n/a
 
  
 
2 years
 
  
 
A$35.90
 
  
 
n/a
 
  
 
n/a
 
LTIP awards
(1)
  
 
14.68
 
  
 
0.25%
 
  
 
5 years
  
 
A$35.90/A$33.81/A$38.56
 
  
 
28.0
% 
    
n/a
  
MAP awards
(2)
  
 
22.88
 
  
 
n/a
 
  
 
1-5 years
 
  
 
A$38.36/A$36.91/A$35.90/A$45.88
 
    
n/a
    
 
4.90
% 
Transitional and Commencement KMP awards
    
28.35
      
n/a
      
2 years
      
A$38.56
      
n/a
    
 
n/a
 
Shareplus
  
 
24.96
 
  
 
0.21%
 
  
 
3 years
 
  
 
A$30.19
 
  
 
n/a
 
  
 
5.59
% 
BHP Group Plc
                                                
MAP awards
  
 
18.66
 
  
 
n/a
 
  
 
3 years
 
  
 
£17.13
 
  
 
n/a
 
  
 
5.70
% 
Shareplus
  
 
15.32
 
  
 
0.12%
 
  
 
3 years
 
  
 
£12.11
 
  
 
n/a
 
  
 
6.40
% 
 
(1)
 
Includes LTIP awards granted on 20 October 2020, 2 November 2020 and 1 December 2020.
(2)
 
Includes MAP awards granted on 21 August 2020, 24 September 2020, 20 October 2020 and 7 April 2021.