Fletcher Building FY26 Remuneration Report

Fletcher Building Limited, 810 Great South Road, Penrose, Auckland 1061, New Zealand
4 September 2026

Fletcher Building FY26 Remuneration Report

Fletcher Building has published its FY26 Remuneration Report, which is now available on
the Company’s website and attached here.

The Remuneration Report will be the subject of a non-binding resolution at the 2026
Annual Shareholders’ Meeting to be held on 21 October 2026. Additional details will be
provided in the Notice of Meeting, which is expected to be released on or around 18
September 2026.

ENDS

Authorised for release to the market by Haydn Wong, Company Secretary.
_____________________________________________________________________________________________________________
For further information please contact:

INVESTORS Jeremy Yan, GM Corporate Finance & Investor Relations +64 27 295 2384 Jeremy.Yan@fbu.com
MEDIA Christian May, Chief Corporate Affairs Officer +64 21 305 398 Christian.May@fbu.com

For information on Fletcher Building visit fletcherbuilding.com

---

FY26 Remuneration Report
Fletcher Building Limited

Fletcher Building Limited Remuneration Report 2026 2



Message from the People and Remuneration Committee
Chair
Dear Shareholders,
On behalf of the Board, I am pleased to present Fletcher
Building’s Remuneration Report for the financial year ended
30 June 2026.
The year in review
Following the completion of the Group’s strategic and
operating model review, FY26 was focused on translating
strategy into action. The Committee oversaw the embedding
of these strategic changes across organisation structures,
people practices and remuneration frameworks, while
supporting leadership through a period of significant
organisational and portfolio change.
During the year, Fletcher Building completed the divestment
of the Construction division, continued to work through the
sale of Fletcher Reinforcing and Wire, and progressed the
portfolio review of our Residential & Development businesses.
The Committee has remained focused on supporting
leadership stability, employee engagement and performance
through the uncertainty inherent in these processes.
Consistent with the commitments made in last year’s report,
we undertook comprehensive reviews of our Short-Term and
Long-Term Incentive schemes, as well as Group-wide benefits.
The resulting changes are designed to better align
remuneration frameworks with Fletcher Building’s revised
strategy, decentralised operating model, and restoring
performance to deliver sustainable shareholder value. Further
detail on these changes is set out in Section 1 of this report.
Alongside these changes, the Committee remained focused on
key outcomes relating to safety, financial performance and
culture across the Group.
While performance was strong across several of our safety
lead and lag indicators, FY26 was marked by one fatality and
three serious life-altering injuries. Our top priority remains
seeing every person returns home safely, and we extend our
deepest sympathies to all those affected.
In line with our revised Short-Term Incentive (STI) design, the
safety component of the STI was therefore forfeited by the
Managing Director and Group CEO, all Executives reporting to
the Group CEO and relevant Division and Business Unit
leaders.
Financial performance improved throughout the year, with the
Group delivering a stronger finish to FY26 than initially
expected. Following the application of Board discretion to
exclude gains from divestments and property sales, STI
outcomes for the Managing Director and Group CEO and Chief
Executives ranged from 1% to 62% of maximum opportunity
(average 32%), reflecting the financial, safety and business
improvement performance of the Group's core operating
businesses.
Alongside the level of organisational change during FY26, it is
pleasing that Fletcher Building continued to make progress on
pay equity. Our gender pay parity gap reduced to 3.3% from
4.0% last year
1
, indicating improved pay outcomes for women
and men performing roles of similar size and scope.
During the year, we also welcomed James Miller to the
Committee, alongside Tony Dragicevich and myself. James has
brought valuable experience and perspective to the
Committee's work.
The year ahead
With the strategic review complete, and the revised operating
model and refreshed remuneration frameworks now in place,
our priority for FY27 is continued execution and performance.
While the Group enters the year well-positioned, market and
cost uncertainty is contributing to delays and some
cancellations of new commercial projects which may weigh on
performance in the first half of FY27.
The Committee will continue to focus on people and
remuneration practices that reinforce accountability,
disciplined performance and shareholder alignment. We will
maintain a strong focus on proactive leadership and
succession planning across the Group, including the
development of leadership capability to support future
business needs.
It is encouraging that engagement across the Group is above
the upper quartile benchmark at an eNPS of 41. I would like to
thank our people for their professionalism, resilience and
commitment throughout a period of significant change.
I invite you to review the full FY26 Remuneration Report.

Jacqui Coombes
Chair, People and Remuneration Committee
1
Restated to exclude the divested Construction division.

3 Fletcher Building Limited Remuneration Report 2026


CONTENTS
1. FY26 & FY27 Remuneration Framework Changes 3
2. FY26 Remuneration Framework Overview 6
3. Performance Outcomes 12
4. Managing Director & Group CEO Remuneration 15
5. Frequently Asked Questions 18
6. Employee Remuneration 22

1. FY26 & FY27 REMUNERATION FRAMEWORK CHANGES
The following table summarises key changes to our remuneration policies and frameworks during the current and future
financial years alongside the rationale and outcomes related to these changes.
Element and overview Year Detail Rationale and outcome
Short-term incentive (STI)
plan

At the start of FY26 Fletcher
Building was amidst a
strategic and operating
model review. We therefore
undertook a high-level
review ahead of FY26,
focusing on critical changes
only. A comprehensive
review was completed
ahead of FY27 considering
our decentralised operating
model and shift towards a
greater strategic focus at a
Business Unit (BU) level.
FY26
The following critical changes were made as
part of the high-level review:
• Safety gate: Simplification of criteria for
the safety gate to include safety walks only
(removing programme facilitation), to
emphasise the importance of active and
authentic leadership for safety on site.
• Increased weighting on financial goals:
From a range of 50%-65% (differentiation
based on role type) to an 80% weighting
for all role types.
• Group Earnings Before Interest and Tax,
before Significant Items (EBIT) goal:
Inclusion of a new Group EBIT goal for all
participants, which enabled the removal of
the Group and Divisional EBIT multipliers,
providing simplification.
• Gate to Group EBIT goal: For Divisional /
BU participants, the Division / BU EBIT
threshold acts as a gate to the Group EBIT
goal and the business improvement goals.
• Decreased weighting on business
improvement: From a range of 25%-40%
(differentiation based on role type), to
10% for all role types.
This revised design placed a
greater focus on financial
performance at an 80%
weighting. This was appropriate
given the organisation’s poor
financial performance prior to
and including FY25.
The combination of a Group
EBIT goal and a Division / BU
EBIT goal provided a balanced
approach between a focus on
BU results and collaboration to
drive Group performance, while
the strategic review was
underway.

FY27 The following key changes were made
following the comprehensive review:
• Introduction of a Group EBIT gate to cap
Division/BU plans at target: A minimum
level of collective Group financial
performance is required before
Divisions/BUs are eligible for above-target
payments.
• Removal of the Group EBIT goal from
Division/BU plans: With Group EBIT now
operating as a gate to outperformance for
Division/BU plans, all financial measures
on these plans are based on Division/BU
performance – aligned to our refreshed
strategy. Overall Group performance
carries significant weight in the overall
The introduction of a Group
EBIT gate to cap payments, is an
important governance
mechanism to prevent payment
for outperformance at a
Division/BU level when the
collective Group has materially
underperformed.
A stronger focus on Division/BU
performance for business
leaders aligns to our
decentralised operating model
and strategic BU focus, balanced
with the newly introduced
Group EBIT gate.

Fletcher Building Limited Remuneration Report 2026 4

Element and overview Year Detail Rationale and outcome
incentive opportunity (STI plus LTI) given
the Executive Long-term Share Scheme for
Chief Executives (CEs) includes Group goals
only.
• Consistent safety measures across all role
types: Safety lead goals historically
differed by role type. From FY27, the lead
goal will be based on % critical risks
controlled for all role types, providing
simplification.
Focusing all roles on % critical
risks controlled acknowledges
the importance of this measure,
to which all participants can
meaningfully contribute, to
drive our focus on zero serious
injuries across the Group.
Executive long-term share
scheme (ELSS)

The ELSS was
comprehensively reviewed
in FY26 to align more closely
with Fletcher Building’s
revised strategy and
financial framework.
Recognising that our
strategy demands a step
change in performance and
leadership impact, the ELSS
was redesigned to become a
more powerful lever for
driving transformation.
In the medium term, the
scheme focuses on restoring
performance and capital
efficiency.
Over the longer term, our
focus will shift to sustainable
value creation and the
Board has therefore
committed to reviewing the
scheme again ahead of the
FY29 offer.
FY26
The following key changes were made:
• Absolute Total Shareholder Return (aTSR)
replaced Relative Total Shareholder Return
(rTSR) as a performance measure.
• Return on Invested Capital (ROIC)
replaced Return on Funds Employed
(ROFE) as a performance measure.
• The 3-year performance period was
aligned to Fletcher Building's financial year
(1 July – 30 June) rather than 1 September
– 30 August.
• Chief Executive ELSS opportunity (excl.
the Managing Director and Group CEO):
For the 2025 offer, the ELSS opportunity
was increased from 50% to 100% of base
salary (aligned to the upper quartile of
comparable roles). From 2026 onwards,
the opportunity will be 70% of base salary
(aligned to the median of comparable
roles). No change was made to the
Managing Director and Group CEO's target
ELSS opportunity (150% of base salary).
• From the FY27 offer, the ELSS will be
offered as share rights rather than the
current loan share scheme.
Given Fletcher Building has not
delivered an economic profit
since FY09 (with the exception
of FY16 and FY22), our
immediate focus is on delivering
absolute value to shareholders.
aTSR is the most direct measure
thereof through share price
appreciation and dividends. This
also addresses the limitations of
a small Australasian comparator
group when using rTSR as a
measure.
ROIC was adopted as a more
robust and widely understood
measure of capital efficiency,
aligning with our revised
financial framework.
The revised Chief Executive
opportunity emphasises the
step change required in
performance and provides a
meaningful interest in the long-
term success of the Group.
Historically, the loan share
mechanism was tax beneficial in
New Zealand. However,
following a comprehensive
review by Inland Revenue (IRD)
in 2018, changes were
introduced to remove these
benefits. Share rights is a simple,
market-aligned alternative that
provides participants with the
same opportunity to share in
the company's long-term
performance.
FY29 The ELSS Performance measures (aTSR and
ROIC) will be re-reviewed ahead of the FY29
offer.
This approach enables the ELSS
to evolve aligned to Fletcher
Building’s medium- and longer-
term strategies.
The treatment of fatalities
and serious injuries

At the October 2025 Annual
Shareholder Meeting,
FY26 The following terms apply from FY26 onwards:
• In the event of a fatality, the safety
component of the STI is automatically
forfeited for the Group CEO, all Executives
reporting to the Group CEO and
accountable leaders at a Divisional and BU
This framework provides a
simple and transparent
approach to the treatment of
fatalities, while retaining an
appropriate level of Board
discretion.

5 Fletcher Building Limited Remuneration Report 2026

Element and overview Year Detail Rationale and outcome
shareholders sought
assurance that Fletcher
Building appropriately
considers serious injuries
and fatalities in
remuneration outcomes.
We therefore reviewed our
approach to the treatment
of fatalities and serious
injuries, and the impact they
have on remuneration
outcomes.
level in which the fatality occurred. Below
a leader level, incentive impacts are also
considered for individuals with operational
control.
• Serious injuries do not result in an
automatic STI adjustment. Any
adjustments are discretionary, following
an assessment which considers severity,
responsibility and circumstances.
• Additional Board discretion may apply as
appropriate and include:
• Determining which incidents are
included, particularly the ability to
exclude incidents where the
organisation was not at fault (e.g.,
third party motor vehicle incidents);
and
• Adjusting the impact beyond the
automatic forfeiture of the safety
component, particularly in cases of
multiple events.
Review of centrally offered
benefits (i.e. offered to all
businesses and employees
across the Group)

A fulsome review of the
benefits offered at a Group
level was conducted in FY26
to deliver as much value as
possible, to as many of our
people as possible, while
continuing to manage costs
in a responsible way.
FY26 The following key changes to benefits were
made effective 1 April 2026:
• KiwiSaver: We match employee
contributions up to 4% of base salary so
employees can benefit sooner than the
legislated increase in 2028.
• Parental Leave: We remain committed to
supporting new parents and will continue
to provide up to 26 weeks fully paid leave
for Primary Carers and now provide 2
weeks fully paid leave for Secondary
Carers (reduced from 4 weeks). Our Policy
no longer includes paid return-to-work
benefits.
• FBuShare: No offer was made in 2026
because less than a third of our people
benefitted from the plan.
The Government’s mandated
KiwiSaver increase enhances
and supports long-term financial
wellbeing and, with 85% of our
people contributing to KiwiSaver
before the statutory increase to
3.5% of base, we knew this is a
benefit our people value.
As at 30 June 2026, 88% of our
permanent employees
contribute to KiwiSaver, 52% of
which now contribute 4% or
more.
The updated Parental Leave
Policy continues to provide
meaningful support to new
parents while managing the
needs of our businesses and
costs responsibly. Although paid
return-to-work benefits have
been removed, employees may
request flexible working
arrangements to support their
return from parental leave.
FBuShare was paused in 2026 as
we realised that it can be costly
for our people to meaningfully
contribute and the plan didn’t
fully support our decentralised
operating model where business
unit performance is the key
focus.

Fletcher Building Limited Remuneration Report 2026 6

Managing Director and
Group CEO severance terms

Following the FY25
Remuneration Report,
investors sought clarity
about severance
arrangements for the
Managing Director and
Group CEO.
FY26 The FY26 Remuneration Report includes a
summary of the Managing Director and Group
CEO's severance terms (refer to Section 4.4).
Enhanced disclosure addresses
investor feedback by providing
clarity about the Managing
Director and Group CEO’s
severance arrangements.

2. FY26 REMUNERATION FRAMEWORK
The following sections describe the remuneration framework in place during FY26.
2.1 The role of the People and Remuneration Committee
The principal role of the People and Remuneration Committee is broader than purely remuneration matters. Its role is to oversee
people and organisation matters affecting the Group, including development and succession planning for the Group CEO,
performance and remuneration of the Group’s senior leaders, culture (including diversity and inclusion), remuneration and
benefits policies, and major organisational changes.
The People and Remuneration Committee is kept appraised of relevant market information and best practice, obtaining advice
from external advisors when necessary.
During FY26, the People and Remuneration Committee focused on reviewing people and remuneration practices to remain
aligned to the Group’s evolving strategic priorities and business needs. The Committee oversaw and approved remuneration
arrangements arising from changes to Chief Executive portfolios (including the Light Building Products and Heavy Building
Materials businesses) and monitored the outcomes and expenditure associated with the Group’s annual remuneration review. It
reviewed and approved the Group's short- and long-term incentive plans, considering emerging remuneration trends and market
practice, and maintained oversight of developments in employment and labour legislation, pension plan governance and
diversity, equity and inclusion metrics.
Alongside its oversight responsibilities, the Committee prioritised proactive leadership and succession planning, which included
the development of a leadership framework designed to strengthen capability and support future talent needs. For this report,
the Committee considered investor feedback received and identified opportunities to further enhance disclosure and
governance practices where appropriate.

7 Fletcher Building Limited Remuneration Report 2026

2.2 Remuneration strategy and framework
Set out below is the FY26 remuneration framework for Chief Executives, illustrating its alignment to the organisation’s
governance and strategy.

Governance
Our Board is responsible for the Group’s remuneration policy, which is available on our website, with the People
and Remuneration Committee assisting in the conduct of its responsibilities. A key role of the Committee is to
oversee people, remuneration and organisation matters affecting the Group.
Remuneration Principles
Shareholder
Focus on creating
shareholder value by
driving an ownership
culture through a
meaningful interest in the
Group's success.
Our People
Attract and retain high
calibre talent, rewarding
high standards of
performance and values.
Strategy
Focus on sustainable
earnings, profitable
growth and key Company
goals and objectives
(short- and long-term).
Risk
Encourage conduct that
does not expose the
Group to inappropriate
risk while promoting high
standards and
accountability.
1
Measures apply from the FY26 offer for which the performance period is 1 July 2025 to 30 June 2028. Previous offers for which the vesting period ends
in FY26 and FY27 will continue to be subject to the previous measures (rTSR and ROFE).
Guaranteed remuneration
component
s

Remuneration element Element delivery Performance measure Relationship to strategy
Fixed Remuneration
Executives are
benchmarked against
peer roles across New
Zealand and Australia
generally comparable in
size, complexity and
industry.
Includes base salary,
contributions to
KiwiSaver /
Superannuation and any
benefits provided in
cash or kind.
Set based on capability,
performance, job size,
and industry
benchmarks for the
country(s) in which each
role operates.
Attract and retain key
talent to drive the
delivery of the Group
strategy. Rewards
ongoing performance in
role.
At
-
risk remuneration components


(subject to performance outcomes)

Short-Term Incentive
Recognises, on a
discretionary basis, the
achievement of
stretching financial and
non-financial
performance objectives.
Following the release of
the final audited
financial year results, a
portion is paid in cash,
and the remainder is
deferred into equity for
2 years.
Rewards for financial,
safety and business
improvement
performance, measured
using a balanced
scorecard.
Reinforces the link
between pay and
performance by focusing
leaders on strategic
priorities and business
outcomes within their
control.
Long-Term Incentive
Drives long-term
sustainable results, and
the creation of
shareholder value.
Allocation of Fletcher
Building shares, with
vesting after 3 years,
based on the
achievement of
shareholder return and
capital efficiency goals
over this period.
Allocation is made using
face value at the time of
grant.
Two equally weighted
measures: Absolute
Total Shareholder
Return (aTSR) and
Return on Invested
Capital (ROIC)
1
.
Recognising our strategy
demands a step change
in performance and
leadership impact, the
LTI is designed to evolve
to become a more
powerful lever for
driving transformation,
while engaging senior
leaders and maintaining
a strong link between
executive reward and
shareholder outcomes.
Remuneration element Element delivery Performance measure Relationship to strategy

Fletcher Building Limited Remuneration Report 2026 8

2.3 Fixed Remuneration
Fletcher Building’s policy is to set fixed remuneration based on capability, performance, size of role and industry benchmarks for
the country(s) in which each role operates. Remuneration levels are independently reviewed and benchmarked annually to
assess market competitiveness, considering our market for talent (i.e. where we win talent from and lose talent to). Our peer
organisations display similar characteristics to Fletcher Building by way of industry/sector, market capitalisation, revenue,
geographic scope and headcount.
Participation in retirement savings plans is made available to employees as required by remuneration practices in the relevant
countries where the Group operates. Medical insurance is offered to the Managing Director and Group CEO and Chief Executives
as a component of their fixed remuneration package.
2.4 Short-Term Incentive (STI)
The following table summarises the Senior STI plan which applied to the Managing Director and Group CEO and Chief Executives
in FY26.
STI Element Description
General

Eligibility
• Participation in the STI plan is by annual invitation at the discretion of the Board and typically
includes senior leaders who have a direct impact on the Group’s performance.
Opportunity
• Managing Director and Group CEO: Target = 100% of Base Salary
• Chief Executives: Target = 70% - 80% of Base Salary (role dependent)
• Maximum opportunity is 1.5x Target for all participants
Vehicle
• Managing Director and Group CEO: 50% cash; 50% deferred into equity (share rights) for 2 years
• Chief Executives: 60% cash; 40% deferred into equity (share rights) for 2 years
Performance conditions

Overview
• The STI plan is designed to incentivise the Group’s earnings, operating cash and those measures
that drive sustainable business performance by rewarding participants' performance against
financial, safety and business improvement goals.
Performance
conditions
and
weightings
• The financial, safety and business improvement goals vary by role, as outlined below:
Measure Description
Operational Executives

Functional Executives

Safety gate
• Safety leadership interactions
1
reinforce a line-led safety
culture, and places emphasis on the importance of active
and authentic leadership for safety on-site.
12 6
Financial
• Managing Director and Group CEO and Functional
Executives in Corporate: Group EBIT and trading cash
(excluding significant items and legacy cashflows).
• Operational Executives in Divisions: Divisional and Group
EBIT and trading cash (excluding significant items), gross
proceeds, funds, Days Sales Outstanding (DSO) and work
won, depending on the division's priorities.
• Group or Divisional EBIT is a gate to the business
improvement goals, i.e. if the EBIT threshold is not met,
business improvement goals are not payable.
Target: 80%
(130% max)

Safety
• For businesses with TRIFR (Total Recordable Injury
Frequency Rate) >2.0, the safety component of the STI
plan includes a safety lead (risk) and safety lag (TRIFR)
measure, weighted at 5% each.
10%


1
A safety leadership interaction is a purposeful engagement in which leaders engage directly with frontline teams to gain an understanding of how work is
performed in practice, and to reinforce a culture of safety and continuous improvement.

9 Fletcher Building Limited Remuneration Report 2026

STI Element Description
• For businesses with TRIFR <2.0, the safety component
consists of lead indicators only, weighted at 10%. TRIFR is
still tracked for these businesses, and if it increases past
the overall Group TRIFR, these participants lose 5% of the
total 10% safety weighting in the STI.
• The safety lead goal differs by role: It is based on risk
containment sweeps
2
for Operational Executives and for
Functional Executives on those areas of safety culture
they are most able to influence.
• In the event of a fatality, the safety component is
automatically forfeited by the Group CEO, all Executives
reporting to the Group CEO and accountable leaders at a
Divisional and BU level in which the fatality occurred.
Business
improvement
• Business improvement goals for Chief Executives are
aligned to the different priorities of their businesses or
functions, and may include customer, people
(engagement, talent & diversity), sustainability,
innovation and critical projects or other strategic goals
that drive performance beyond the current financial year.
10%
Total STI scorecard at target (Financial Target + Safety + Business
improvement)
100%
Total STI scorecard at max (Financial Max + Safety + Business improvement) 150%
• Performance hurdles for our financial goals are set at three levels: a threshold level, which must
be met before payment is made, a target level and a maximum level that reflects stretch
performance. Financial thresholds are generally set at 90% of target hurdles, with maximum
generally at 110% of target hurdles.
• The performance range for safety and business improvement goals are between 0% and 100%,
with no opportunity for stretch performance.
Timing

Assessment of
awards
• An assessment of performance against the performance conditions occurs following finalisation
of the Group’s full year results.
• Each of these financial goals are assessed separately at this time and achievement against each
executive’s business improvement goals is reviewed and approved annually.
• Eligibility for consideration of a payment under the STI requires a participant to remain employed
by the Group at the date of payment, following the end of the financial year.
• Both the cash and deferred equity (share rights) components are awarded as soon as reasonably
practicable after the announcement of the Company’s full year results in August each year.
• In the event of a divestment during the performance period, performance hurdles for FB Group
and impacted Divisions / BUs are reset for the relevant period.
• In a change of control event, the Board has discretion to determine vesting outcomes and the
treatment of the STI, having regard to performance assessed up to the relevant transaction date.
Deferred
Equity:
Disposal
restrictions
and dividends
• A participant is entitled to receive one ordinary share for each vested share right.
• The share rights will vest and be automatically exercised into shares on the second anniversary of
the grant date, subject to the plan’s leaver provisions.
• There will be no disposal restrictions on the shares received following the vest and exercise of
share rights, subject to any minimum shareholding obligations and insider trading policies.
• No dividends (or voting rights) are received on the deferred share rights during the deferral
period.



2
Risk Containment is an important Critical Risk Management field walk activity to identify and immediately intervene to reduce critical risk exposure.

Fletcher Building Limited Remuneration Report 2026 10

2.5 Long-Term Incentive (LTI)
The following table summarises the Group’s equity-based Executive Long-Term Share Scheme (ELSS).
LTI Element Description
General

Eligibility
• Participation in the ELSS is by annual invitation at the discretion of the Board and those eligible
include the Managing Director and Group CEO, and Chief Executives.
Opportunity
• Managing Director and Group CEO: Target = 150% of Base Salary
• Chief Executives: (FY26 offer only) Target = 100% of Base Salary
• Maximum opportunity is 1.05x Target for all participants
Vehicle
• Under the ELSS, participants purchase shares in the Company at the offer price with an interest-
free loan. The offer price is established at market value at the commencement of the three-year
restrictive period. The shares are held by a trustee on behalf of participants until the end of that
three-year restrictive period.
• Provided the nominated share performance criteria are met and participants remain employed
with the Group throughout the restrictive period, a taxable cash bonus is paid sufficient to repay
the interest-free loan related to vested shares and legal title in the shares is then transferred to
the participants.
• Subject to the impact of any increase in the tax rate since allocation, net after-tax dividends
related to the vested shares are paid to the employee.
• To the extent that the performance criteria are not met, or the participant ceases to be employed
by the Group, the shares are forfeited, and the proceeds used to repay the interest-free loan.
Exceptions to this are considered in the case of redundancy or retirement.
• In a change of control event, the Board has discretion to determine vesting outcomes and the
treatment of the ELSS, having regard to performance assessed up to the relevant transaction
date.
Performance conditions

Overview
• The ELSS is designed to evolve with Fletcher Building's strategy, balancing a medium-term focus
on returning to profitability, before transitioning to measures (e.g. Earnings Per Share) that better
support sustainable long-term growth as business performance strengthens.
Performance
conditions,
weightings,
and timing

FY26 ELSS
offer – made
on 1 July 2025,
tested on 30
June 2028 (i.e.
at the end of
FY28)
• The FY26 ELSS offer is subject to two equally weighted (50% each) performance criteria, tested at
the end of a 3-year restrictive period:
• Absolute Total Shareholder Return (aTSR); and
• Return on Invested Capital (ROIC).
Absolute Total Shareholder Return
• aTSR performance is determined by achievement of a Cumulative Annual Growth Rate (CAGR) set
with reference to Fletcher Building’s Cost of Equity (CoE). For the FY26 offer, the vesting threshold
(11.5%) is set above CoE, with target (15%) and maximum (16.8%) set progressively higher.
• The absolute TSR performance and vesting entitlements are set out in the table below.
aTSR performance hurdles Percentage entitlement
Below Threshold: 11.5% CAGR Nil
Between Threshold and Target: 11.5% - 15.0% CAGR 50% - 100% linear pro-rata
Between Target and Maximum: 15.0% - 16.8% CAGR 100% - 110% linear pro-rata
Above Maximum: 16.8% CAGR 110%
• aTSR includes an opportunity for above-target performance (110%) to drive and reward
outcomes that deliver exceptional shareholder value. The vesting scale extends beyond target, so
higher returns continue to translate into increased vesting for genuinely outstanding
performance.
Return on Invested Capital
• ROIC performance is determined by dividing NOPAT by average invested capital over the prior 12
months and assessing it using the performance thresholds set out in the table on the following
page.

11 Fletcher Building Limited Remuneration Report 2026

LTI Element Description
• The ROIC performance range includes threshold and target hurdles, which have been set with
consideration of Fletcher Building’s weighted average cost of capital (WACC). Given ROIC was
significantly below WACC at the time of the offer (~4.5% vs 8-9%), the target for the FY26 offer of
7.3% reflects a path to strong improvement, with the expectation that targets will move to WACC
levels of at least 8% with the 2026 offer.
• The ROIC performance and vesting entitlements are set out in the table below.
ROIC performance hurdle Percentage entitlement
Below threshold: 6.1% ROIC Nil
Between threshold and target: 6.1% - 7.3% ROIC 50% - 100% linear pro-rata
Above target: 7.3% ROIC 100%
•
2.6 Minimum shareholding requirement
Over time, the Managing Director and Group CEO, Chief Executives (reporting directly to the Managing Director and Group CEO)
and General Managers must acquire and maintain a holding in the Group’s ordinary shares until such time as the greater of the
sum invested or the market value of their shareholding exceeds 100%, 75% and 50% of their base remuneration respectively. Any
shares granted under the ELSS do not count towards the minimum shareholding requirement unless they vest.
Although there is no time limit in which this investment must be built, any shares which vest under the STI plan, ELSS or any
similar scheme cannot be sold until their shareholding equals or exceeds the minimum requirement.
These shareholding requirements strengthen the alignment of executives’ equity with long-term Group performance and the
interests of shareholders.
As at 30 June 2026, the Managing Director and Group CEO (Andrew Reding) had a holding in the Group’s ordinary shares equal to
26.5% of his base remuneration. These figures have been calculated in accordance with the minimum shareholding requirement
methodology, which uses the greater of the sum invested or the market value of the shares. This does not include any unvested
STI Equity or LTI awards. Provided the Group achieves on-target performance, the combined STI Equity and LTI target
opportunities for this role would amount to the value of this requirement within 3 years.
2.7 FBuShare (Fletcher Building’s employee share purchase plan)
Following a comprehensive review of our benefits in 2026, it was decided that no FBuShare offer would be made in 2026 as less
than a third of our people benefitted from this plan. The plan also didn’t reflect our new operating model where business unit
performance is the key focus. All in-flight FBuShare awards will continue to operate in accordance with the terms of the plan
rules.
The mechanisms of the plan are as follows: employees acquire shares in the Group and, if they remain employed after a three-
year qualification period, become entitled to receive one bonus award share for every two shares purchased in the first year of
the qualification period and still owned at the end of that period. FBuShare does not require any performance criteria to be met.
Participation is limited to permanent employees and Directors are not eligible to participate.
2.8 Malus & clawback
Our malus and clawback framework applies to unvested and vested STI, both cash and deferred, and unvested and vested LTI
awards. Under this framework, the company has the right to reduce the incentive remuneration component prior to payment or
vesting, and clawback the incentive remuneration amount from a participant for a period of three years from the end of the
financial year for which the STI payment is made or vesting of the LTI.
There are four key steps in the framework, each of which contains a set of parameters and/or questions that guide management
and Directors in determining the extent to which any STI or LTI would be impacted. These steps include:
1. Identifying and investigating trigger events;
2. Assessing trigger events and required consequences;
3. Determining accountability and intent; and
4. Quantifying the adjustment and application.
Although a list of financial and non-financial trigger events has been identified for which this framework would apply, this list is
not exhaustive, and management, the People and Remuneration Committee or Board may determine other events apply in its
ultimate discretion.

Fletcher Building Limited Remuneration Report 2026 12

During FY26 no trigger events were identified and therefore, the Board was not required to consider the application of the malus
& clawback framework.
3. PERFORMANCE OUTCOMES
3.1 5-year performance summary
Financial year FY26
FY25 FY24 FY23 FY22
Short-term performance
Net earnings/loss ($m)
228 (419) (227) 235 432
EBIT ($m)
(1)

431 384 516 782 756
Cash ($m)
(2)

519 413 766 517 592
Managing Director and Group CEO STI achieved
(as a % of maximum)
37.5% - - - -
Long-term performance
1-year TSR (%)
(3)
17 7 (45) 15 (28)
3-year TSR (%)
(4)
(21) (33) (45) 74 12
ROFE (%) 9.3 8.0 10.0 17.1 19.3
ROIC
(5)
5.2 4.5 5.5 5.4 8.9
Dividends (cents per share)
(6)
0.0 0.0 0.0 40.0 36.0
Year-end share price ($) 3.39 2.89 2.83 5.42 5.04
Managing Director and Group CEO LTI Vested (as
a % of maximum)
- - - - -
Managing Director and Group CEO LTI offer date

(7)

1 September
2023
1 September
2022
1 July 2021 1 July 2020 1 July 2019
(1) EBIT excludes significant items as reported in the relevant performance year.
(2) The Cash measure was operating cash flow in FY19-FY22, trading cash flow (excluding significant items) in FY23, trading cash flow (excluding significant items and legacy) in FY24
and FY25, and free cash flow (excluding significant items and legacy) in FY26. Trading cash flow excluding significant items is calculated consistently with the published Group cash
flow from operating activities, excluding cash tax and significant items, but adjusting/deducting for lease interest and principal payments classified as part of cash flows from
financing activities, to represent business unit-controlled cash flows. Trading cash flow is adjusted for net capital and investment expenditure to reflect free cash flow available to
reduce external borrowings, meet funding costs and potentially fund dividends to shareholders.
(3) Share price movement in year and gross dividend received, to prior year closing share price.
(4) Using 5-day VWAP and the 3-year restrictive period, as per the terms of the ELSS.
(5) ROIC was introduced as a performance measure in FY26.
(6) Gross dividend paid during the period.
(7) The Managing Director and Group CEO was appointed on 30 September 2024. His first in-flight ELSS award is expected to complete its restrictive period in August 2027.

3.2 FY26 Short-Term incentive (STI) performance
3.2.1 Safety Performance
All executives met or exceeded the required safety leadership interactions in FY26 and, with the exception of Residential and
Development, all divisions exceeded their safety lead goals (% critical risks controlled). While Residential and Development did
not meet its target, the division achieved 43% of the required improvement. The division has subsequently implemented
targeted actions to improve the quality and consistency of critical control verifications, address recurring control deficiencies
identified through reviews, and strengthen site manager capability.
TRIFR across the Group increased from 2.9 in FY25 to 3.7 in FY26. While this partly reflects the impact of divested businesses, it
also highlights the need for improved safety performance. As such we will review and refresh our Protect framework in FY27.
In the event of a fatality, the safety component is automatically forfeited by the Managing Director and Group CEO, all Executives
reporting to the Group CEO and relevant Division and BU leaders. The impact on BU leaders is independently assessed (i.e., a
fatality in one BU does not impact other BU leaders within the same or different divisions). In the event of a serious injury, the
Board has the discretion to adjust any or all of the STI payment and in doing so considers the leader’s length of time in role (and
therefore ability to influence), their demonstrated leadership prior to the incident as well as the quality of the leader’s response
post-incident. The Board recognises the importance of this discretion and has, and will continue to, adjust outcomes where it is
considered appropriate.

13 Fletcher Building Limited Remuneration Report 2026

In FY26, tragically, we had one fatality and three serious life-altering injuries – as detailed in the table below. Aligned to our belief
that all injuries are preventable, the Safety, Health, Environment and Sustainability (SHES) Committee considered all factors
associated with these incidents, including leadership performance and efforts of the teams.
Where appropriate, the SHES Committee provides its findings to the People and Remuneration Committee to review the impact
on remuneration outcomes. Serious injuries which were fatal or serious with potentially fatal consequences are reviewed to
assess whether discretion should be applied to impact STI outcomes. This helps prevent leaders being unfairly sanctioned for
events which, under slightly different circumstances, would not have caused serious harm.
Event Investigation findings and actions Impact on STI safety component
Brian Perry Civil: Fatality
caused by a falling piece of
faulty crane equipment.
Following an investigation, equipment
maintenance, plant management and exclusion
zone requirements were reviewed and enhanced
to address identified improvement opportunities.
The full safety component (10%) was
forfeited for the Managing Director
and Group CEO, all Chief Executives
and relevant General Managers.
Brian Perry Civil: A contractor
sustained serious injuries
when a steel beam fell from a
truck deck during unloading.
An investigation found that, despite existing steel
handling controls, the steel beam became unstable
and tipped from the truck deck during unloading,
resulting in a review and reinforcement of steel
handling and unloading requirements.
A 50% reduction in the safety
component was applied to the
accountable General Manager.
Project Burgundy (Taupō): A
serious lower-limb injury to a
contractor caused by a
telehandler incident.
Investigation findings identified non-compliance
with exclusion zone requirements and operating
controls, leading to procedural improvements and
targeted retraining.
A 50% reduction in the safety
component was applied to the
Divisional CE
1
, all functional GMs and
the relevant operational GM.
PlaceMakers: A serious hand
injury to a roofing contractor
caused by contact with a
sharp roof edge.
Following an investigation, additional controls were
implemented and PPE requirements reviewed to
strengthen work-at-height safety.
A 50% reduction in the safety
component was applied to the
Divisional CE
1
, all functional GMs and
the relevant operational GM.
(1) Noting the full safety component was forfeited by the Group CEO and all Chief Executives, due to the fatality.

3.2.2 Financial performance
Board Discretion
The formulaic FY26 STI outcomes reflected strong above-budget performance, as reported in our headline earnings. However, it
is the view of the Board that the STI is fundamentally a mechanism to reward core operational performance, and it has therefore
exercised discretion to reduce FY26 STI outcomes by excluding gains from divestments and property sales. While these
transactions are important strategic outcomes, they have no direct involvement in the core activities of the Group’s businesses.
Overall financial performance for the purpose of the FY26 STI is therefore between threshold and budget levels, rather than
exceeding budget as our headline results suggest. Following the Board's exercise of discretion, the FY26 STI financial
performance outcomes were as follows:
• EBIT performance for FY26 was below threshold for the Distribution, Heavy Building Materials and Residential and Land
Development divisions, between threshold and target for the Group, and between target and maximum for the Light
Building Products division.
• Cash performance was above maximum for the Group, Heavy Building Materials and Light Building Products divisions at
half year, while the Distribution division was below threshold. At full year, performance of the Heavy Building Materials
and Light Building Products divisions was between target and maximum while the Group and Distribution division didn’t
meet threshold levels.
• Day Sales Outstanding (DSO) performance is a key measure for the Distribution division and was between target and
maximum for the year.
• Gross Proceeds and Funds are key measures for the Residential and Land Development division. Gross Proceeds was
below threshold at both half and full year, while Funds performance was between threshold and target at half year and
below threshold at full year.

Fletcher Building Limited Remuneration Report 2026 14

3.2.3 Individual business improvement performance
Where the EBIT gate was met, achievement against business improvement goals for Executives ranged from 60% to 100% (full
achievement).
Taking into account performance across these financial, safety and individual business improvement goals, as well as the Board
discretion applied, FY26 STI outcomes for the Managing Director and Group CEO and Chief Executives ranged between 1.3% and
61.6% of maximum, with an average of 32.2%.
Further details about the performance of the Managing Director and Group CEO are outlined in Section 4.5 on page 17.
3.3 Long-Term incentive (LTI) performance
The vesting and forfeiture of shares (due to failure to meet performance criteria) over the last five years are set out in the
following table:
Date of offer Shares offered
% vested % forfeited
July 2025
(1)

1,637,863
In-flight
September 2024
1,302,514
September 2023
776,435
September 2022
(2)
638,499 0% 100%
July 2021
(3)
395,085 0% 100%
(1) As per the updated ELSS design introduced in FY26, grant and test dates were aligned to Fletcher Building’s financial year from the 1 July 2025 offer.
(2) As per the LTI changes introduced in FY23, grant and test dates were aligned to the announcement of the Group’s full year results, and the retests were removed.
(3) The restrictive period for the 2021 grant was extended for 12 months until 30 June 2025. Fletcher Building's TSR did not meet the minimum vesting threshold for the period ended
30 June 2025. Therefore, 100% of the shares in the 2021 grant have been forfeited in August 2025.

15 Fletcher Building Limited Remuneration Report 2026

4. MANAGING DIRECTOR AND GROUP CEO REMUNERATION
4.1 Remuneration package overview
The following diagram illustrates how remuneration is delivered to the Managing Director and Group CEO.


Fixed remuneration Base salary and other benefits


Short-term incentive
Cash (50%)

Deferred Equity (50%)

Long-term incentive
Shares
50% absolute TSR and 50% ROIC



4.2 Remuneration mix
Andrew Reding’s annual base remuneration as at 30 June 2026 was $1,450,000, with an on-target STI of 100% of base salary and
LTI of 150% of base salary. The current mix of remuneration components for the Managing Director and Group CEO is set out
below and illustrates the significant weighting of variable pay (at risk), which is subject to the achievement of short-term and
long-term strategic goals.
The charts below show the Managing Director and Group CEO’s remuneration pay mix as a percentage of total package for both
on-target performance and maximum performance.
Equity pay
Variable pay (at risk)
LTI: Long-Term Incentive
STI: Short-Term Incentive
FR: Fixed Remuneration
(includes base salary and
other benefits)










The table below outlines the Managing Director and Group CEO’s annual remuneration package at target and at maximum in
NZD. This does not reflect actual remuneration received during the year. This information is set out in the next section of the
report.
At target At maximum
Remuneration element
Value in NZD
% of total package
Value in NZD % of total package
Fixed remuneration 1,456,418 28.7% 1,456,418 24.6%
STI cash 725,000 14.3% 1,087,500 18.4%
STI equity 725,000 14.3% 1,087,500 18.4%
LTI 2,175,000 42.8% 2,283,750 38.6%
Total remuneration package 5,081,418 100.0% 5,915,168 100.0%


FR
25%
STI
Cash
18%
STI
Equity
18%
LTI
39%
Start of
the year
End of
Year 1
End of
Year 2
End of
Year 3
MD & Group
CEO Maximum
Performance
Pay Mix
FR
29%
STI Cash
14%
STI
Equity
14%
LTI
43%

Fletcher Building Limited Remuneration Report 2026 16

4.3 Remuneration received
The remuneration Andrew Reding received for FY25 and FY26 is set out in this section
3
.
For completeness, Andrew does not receive any Board fees.

FY26
FY25
(1)

Base remuneration $1,450,005
(2)
$1,093,255
Other benefits
(3)
$6,392 $1,720
Total fixed remuneration $1,456,397 $1,094,975
Short-Term Incentive accrued in the financial year $816,633 -
(4)

Long-Term Incentive vested in the financial year
(5)
- -
Total incentives received $816,633 -
Total remuneration received
(6)
$2,273,030 $1,094,975
Long-Term Incentives granted (only awarded after 3 years, if performance criteria
are met)


Long-Term Incentive – number of shares granted 422,532
(7)
447,607
(8)

Long-Term Incentive – face value of grant $2,175,000 $2,175,000
(1) Andrew Reding was appointed as the Managing Director and Group CEO on 30 September 2024, the FY25 year therefore reflects the period of 30 September 2024 to 30 June 2025.
(2) The Managing Director and Group CEO's received base remuneration was $5 higher than his contracted base salary ($1,450,000) due to the payment of annual leave taken within
his first 12 months of employment, as required by Holidays Act 2003 averaging methodology.
(3) Other benefits include medical insurance. The value for FY25 reflects that medical insurance was only taken up part way through the year, while the FY26 value reflects a premium
change effective August 2025.
(4) No FY25 Senior STI was paid.
(5) As the Managing Director and Group CEO only started in FY25, he was not eligible for any LTI vesting.
(6) This table sets out remuneration awarded for the relevant financial year.
(7) Based on a share price of NZ$3.14 being the volume weighted average price for the thirty business days prior to 1 July 2025. The number of shares granted under the LTI is
calculated after deducting income tax for the relevant financial year.
(8) Based on a share price of NZ$2.96 being the volume weighted average price for the five business days prior to 1 September 2024. The number of shares granted under the LTI is
calculated after deducting income tax for the relevant financial year.

4.4 Managing Director and Group CEO severance terms
The following table summarises key features of the Managing Director and Group CEO’s employment contract.
Term of agreement Notice period by MD and Group CEO Maximum notice period by Company
Open 6 months 6 months
• The Managing Director & Group CEO is subject to restraints of trade which will apply upon cessation of employment. No
separate amount is payable in relation to these restraints over and above the contractual entitlements outlined in the table
above.
• The maximum payment on termination (excluding notice) is 6-months’ base salary.
• The Group's incentive scheme rules set out the treatment of incentives upon cessation of employment and in the event of a
change of control. Under the leaver provisions of these rules, a ‘Good Leaver’ is a participant who does not meet the ‘other
leaver criteria’ which includes serious misconduct, breach of an engagement agreement, ineligibility to hold office under law
or resignation. ‘Other Leavers’ forfeit any unvested incentives in full, while the treatment for ‘Good Leavers’ is as follows:
o STI cash: Retained on a pro-rata basis, calculated based on the portion of the financial year that has elapsed.
o STI deferred equity: Retained in full and vests as per the usual timeframe.
o LTI: Retained on a pro-rata basis, calculated based on the period of the performance period that has elapsed, and
tested as per the usual timeframe and vesting conditions.
In a change of control event, the Board has discretion to determine vesting outcomes and the treatment of incentives, having
regard to performance assessed up to the relevant transaction date.


3
Andrew Reding joined as the Managing Director and Group CEO on the 30
th
of September 2024, for remuneration details relating to previous CEOs refer to prior
Remuneration Reports.

17 Fletcher Building Limited Remuneration Report 2026

4.5 Managing Director and Group CEO FY26 STI outcome
For FY26, financial goals carried a greater weighting (80%) than in previous years to reflect the need to drive improved financial
results. Financial goals are measured on a straight-line basis between threshold and maximum hurdles. Safety and business
improvement goals do not provide for above-target performance. The maximum opportunity (150% of target) is therefore only
driven by financial goals. The table below summarises performance against targets for each goal.
Measure
Scorecard
weighting pay-
out range
Actual
outcome: %
of maximum Comment
Safety gate
Gate for any
payment

Continued to champion the Protect Strategy by
maintaining a strong on-site presence, undertaking safety
walks and engaging directly with teams across Fletcher
Building’s operations.
Financial goals
FB Group EBIT
(gate to individual goals)
0% - 50%

After applying Board discretion, the annual EBIT result
was between the threshold and target performance
hurdles. The goal was partially achieved.
FB Group Free Cash H1 0% - 15%
The half year free cash result was above the maximum
performance hurdle. The goal was fully achieved.
FB Group Free Cash FY 0% - 15%

The full year free cash result was below the threshold
performance hurdle. The goal was not achieved.
Safety goals Note: Full safety component forfeited due to the fatality in Vanuatu during FY26.
Safety lead goal: Successfully achieve 75%
controlled critical risks (an increase from
70% in FY25).
0% - 5%

Forfeited
While this goal was achieved (78% controlled critical
risks), the entire safety component was forfeited due to a
fatality. The focus on the roll-out of critical risk initiatives
is key in driving the right behaviours and creating a safe
workplace.
FB Group Total Recordable Injury
Frequency Rate (TRIFR) reduced from 2.9
to 2.6 or below.
0% - 5%

Group TRIFR has increased from 2.9 to 3.7 during FY26.
While this partly reflects the impact of divested
businesses, it also highlights the need for improved
safety performance. As such we will review and refresh
our Protect framework in FY27.
Individual goals
Achieve net debt within the target range
of $400m to $900m by the end of FY26.
0% - 4%

Net debt closed at $637 million in FY26, comfortably
within the target range and significantly below the FY25
forecast range of $1.05b to $1.10b, reflecting strong
balance sheet management and cash discipline.
Deliver a further $30m of corporate cost
savings on an annualised run-rate basis by
the end of FY26.
0% - 4%

Savings in excess of $30 million were achieved, including
more than $20 million from Corporate Centre initiatives
and approximately $13 million from the removal of
corporate and divisional overhead costs, following the
divestment of the Construction division.
Establish succession plans for all critical
senior leadership roles (CEO and Chief
Executives) by the end of FY26.
0% - 2%

A structured succession planning framework was
established for the CEO and Chief Executive roles,
including a Board-led CEO succession programme,
successor identification, readiness assessments, and
targeted development planning to strengthen leadership
pipeline depth over the medium and long term.
FY26 STI Outcome (as a % of maximum) 0% - 150% 37.5%
Key:

At or above
maximum

Achievement
between target and
maximum

Partial achievement
between threshold and
target

At or below threshold
achievement

Fletcher Building Limited Remuneration Report 2026 18

5. FREQUENTLY ASKED QUESTIONS
Key Questions Fletcher Building Response
Reference
(if applicable)
Remuneration Report vote
Why did you put the
remuneration report to a
vote at the ASM?
As a New Zealand incorporated company listed on the ASX, Fletcher Building
is not required to disclose an Australian-style remuneration report or put that
remuneration report to a vote.
While FB is not legally required to put our remuneration report to a vote, we
presented the FY24 and FY25 report to a non-binding vote (i.e. not a
substantive rule but to understand shareholder views) at the 2024 and 2025
ASM. This decision was taken to enhance and evolve shareholder
engagement on remuneration, in response to feedback from investors, and as
a matter of good corporate governance.
-
What will happen in the
event of 2 strikes against the
remuneration report?
In contrast to Australian requirements, we are not adopting a vote to spill the
board in the event of 2 consecutive strikes. Based on Australian practice, this
resolution is almost never approved, it is expensive, and the FB Directors are
focused on Board renewal.
The Board was renewed during FY25 and we will continue regular
engagement to gain feedback on and improve our remuneration practices
and reporting.
-
Why does FB not comply
with all Australian
requirements?
As a dual listed company, incorporated in New Zealand, we comply with the
Australian requirements that are most meaningful for our shareholders and
will assist in assessing FB’s remuneration.
Complying in full would be cost prohibitive and compliance for compliance’s
sake without increasing value for shareholders. We will consult on and
consider additional information investors would like disclosed.
-
How has the Board
responded to investor
feedback following the
previous Remuneration
Report vote?
FB considered all shareholder feedback and incorporated changes where
appropriate into the remuneration structure and throughout the report.
Key Feedback from the FY25 Remuneration Report vote included questions
about how the Vanuatu fatality will be reflected in FY26 Remuneration
outcomes, and a request to disclose a summary of the Managing Director and
Group CEO’s severance terms. Both items have been outlined within this
report.
Section 1,
Section 3.2
and Section
4.4
Why have all Key
Management Personnel
(KMP) not been included in
the remuneration report?
The decision of who a KMP is has always been discretionary such that
practices vary broadly across the ASX. Furthermore, in New Zealand
disclosure of individuals’ remuneration requires consent. This would be
prohibitive for a broad group and disclosure for many New Zealand
executives could lead to upward pressure on pay over the longer term as well
as the risk of key talent poaching.
-
Overall Remuneration framework
Is there an appropriate
balance between short- and
long-term performance, and
cash and equity?
Executives are focused on the quality of earnings over the longer term via the
LTI component (which is a significant element of total remuneration), the
two-year STI deferral (which is aligned with shareholders via share price
appreciation or depreciation during that time), and those business
improvement STI goals which are future-focused.
Under this approach, a meaningful portion of total remuneration is delivered
in equity (~57% for the CEO and ~40% for Chief Executives at both target and
maximum), supporting strong alignment with long-term shareholder value.
Cash incentives continue to reward short-term in-year performance.
Section 2.2
and Section
4.2

19 Fletcher Building Limited Remuneration Report 2026

Key Questions Fletcher Building Response
Reference
(if applicable)
Has Executive fixed pay
increased in FY26?
There were no changes to the Managing Director and Group CEO’s fixed
remuneration in FY26.
Fixed remuneration increases for Chief Executives were limited to situations
where roles were materially changed (including the Chief Executives of the
Light Building Products and Heavy Building Materials divisions).
Section 2.2
and Section
4.3
Executive Long-term Share Scheme (ELSS)
Why was the LTI
redesigned?
The LTI was redesigned to align more closely with Fletcher Building’s revised
strategy and financial framework. Recognising that our strategy demands a
step change in performance and leadership impact, the ELSS needed to
evolve to become a more powerful lever for driving transformation, while
engaging senior leaders and maintaining a strong link between executive
reward and shareholder outcomes.
The redesigned ELSS places greater emphasis on Fletcher Building’s medium-
term strategic priorities of delivering shareholder value and improving capital
efficiency, through Absolute Total Shareholder Return (aTSR) and Return on
Invested Capital (ROIC) goals. The Board has committed to reviewing the
measures again over the longer-term as the Group returns to a position of
sustained performance and growth - potentially replacing ROIC with Earnings
Per Share (EPS).
Section 1 and
Section 2.5
What are the performance
hurdles for the 2025 offer
and why did you choose
these measures?
The 2025 offer is subject to absolute Total Shareholder Return (aTSR) and
Return on Invested Capital (ROIC) in equal measure, i.e. 50% each. We’ve
chosen these measures for a clear and disciplined focus on what matters
most in the medium-term: Restoring performance and delivering value to
shareholders.
Our measures are intended to evolve in line with our medium and long-term
strategy. For example, ROIC supporting performance improvement in the
medium-term and EPS (earnings per share) becoming more relevant as our
focus shifts to sustainable long-term growth.
Section 1 and
Section 2.5
Why have you replaced
relative TSR with absolute
TSR?
Absolute TSR was selected for two key reasons:
– First, given Fletcher Building’s history of not delivering an economic
profit, we realise our immediate focus needs to be on delivering
absolute value to shareholders. aTSR is the most direct measure
thereof through share price appreciation and dividends.
– Second, relative TSR has limitations for Fletcher Building because the
pool of genuinely comparable organisations across New Zealand and
Australia is small (<10). Ideally, an rTSR measure requires a larger
group to reduce sensitivity to small changes in performance, or
changes to individual companies, which occur in a small cohort.
Section 1 and
Section 2.5
Why have you replaced
ROFE with ROIC?
ROFE presented a number of challenges, including investor concerns around
the treatment of significant items and the lack of a consistent definition
across companies. ROIC is a more robust and standardised measure that
aligns to our financial framework and better reflects how efficiently we use
capital to create value.
Section 1 and
Section 2.5

Fletcher Building Limited Remuneration Report 2026 20

Key Questions Fletcher Building Response
Reference
(if applicable)
How is ROIC defined?
ROIC is defined as NOPAT divided by average invested capital over the prior
12 months, consistent with the framework outlined at the 2025 Investor Day.
– NOPAT is defined as the business’s operating profit after tax.
Specifically, it is calculated as “EBIT (pre significant items) multiplied
by (1 – tax rate)”.
– Invested Capital represents the total capital employed to generate
those earnings. It includes net working capital, fixed assets,
investments, right of use (ROU) assets, and intangible assets.
The use of trailing 12-month averages for both NOPAT and invested capital
helps smooth timing impacts and provides a more stable, comparable
measure of performance over time.
Section 2.5
What is your approach for
setting aTSR hurdles and
what gives you confidence
that they are sufficiently
stretching?
aTSR hurdles are set with reference to our Cost of Equity (CoE). For the 2025
offer, the vesting threshold (11.5%) is set above CoE, with target (15%) and
maximum (16.8%) set progressively higher.
Under this approach, vesting only occurs when shareholder returns exceed
required returns and increase to levels that reflect significant value creation.

Section 2.5
Why is there an opportunity
for above-target
performance?
aTSR includes an opportunity for above-target performance (110%) to drive
and reward outcomes that deliver exceptional shareholder value. The vesting
scale extends beyond target, so higher returns continue to translate into
increased vesting for genuinely outstanding performance.
The ROIC performance measure does not provide an opportunity for above-
target performance.
Section 2.5
What is your approach for
setting ROIC hurdles and
what gives you confidence
that they are sufficiently
stretching?
ROIC hurdles are set with reference to our Weighted Average Cost of Capital
(WACC). Given FY25 ROIC of ~4.5% was below WACC of 8-9%, the target for
the 2025 offer of 7.3% reflects a path to strong improvement, with the
expectation that targets will move to WACC levels of at least 8% with the
2026 offer.
Under this approach, hurdles are stretching by requiring sustained
improvement in capital efficiency and progressing toward returns that create
economic value.
Section 2.5
Will in-flight offers be
impacted in any way?
No, all changes will apply prospectively only. The in-flight offers from 2023
and 2024 will continue to be assessed under the original performance
measures and conditions, i.e. relative TSR and ROFE.
Section 1
Why has there been such a
significant increase in LTI
quantum for Chief
Executives?
The LTI quantum for the 2025 offer is 100% of base salary (aligned to the
upper quartile for comparable roles) to emphasise the step change required
in performance and provide a meaningful interest in the long-term success of
the Group for Chief Executives. From 2026, the LTI quantum will be 70% of
base salary (aligned to the median for comparable roles).
Importantly, this increase is delivered through at-risk equity, meaning
incentives will only be realised alongside significant improvements in
shareholder value.
Section 1 and
Section 2.5

21 Fletcher Building Limited Remuneration Report 2026

Key Questions Fletcher Building Response
Reference
(if applicable)
How does the 'loan-share'
mechanism work and why is
the ELSS changing to a Share
Rights vehicle?
The loan-share mechanism was a long-running plan type that was majority
NZ practice. Under this plan type participants are allocated shares upfront,
funded by an interest-free loan from the company. If performance hurdles are
met, the shares vest and a bonus is used to repay the loan. If hurdles are not
met, the shares are forfeited and no value is realised. Dividends are not paid
on unvested equity but are an additional benefit on shares that vest.

Historically, this mechanism provided a tax benefit, as the loan principal was
not subject to tax. However, following a comprehensive review of Employee
Share Scheme taxation rules by Inland Revenue (IRD) in 2018, changes were
introduced to remove the ability to achieve tax-free capital gains through
these arrangements. Due to the removal of the tax benefit and the
complexity of the mechanism, the ELSS will be offered using share rights from
FY27. Share rights are simple to administer and understand, align with
current market practice across both New Zealand and Australia, and provide
participants with the same opportunity to share in the company's long-term
performance.

Section 1 and
Section 2.5
What is the performance
period and testing
frequency for the ELSS?
Each offer is measured over a 3-year period from 1 July to 30 June. The 2025
offer (made in FY26) is effective from 1 July 2025 to 30 June 2028.
Performance against each offer is measured once at the end of the 3-year
period, and there is no interim testing.
Section 2.5
Are executives allowed to
sell vested shares to cover
their tax liability, even if the
minimum shareholding
requirements aren’t met?
Participants are allowed to sell shares to cover any tax liability that arises
under our equity schemes, even where the minimum shareholding
requirement has not been met.
Tax obligations are managed through either sell-to-cover or approved
disposal arrangements, enabling participants to meet their tax obligations
without compromising long‑term ownership alignment.
Our shareholding calculation methodology uses the greater of the sum
invested or the market value of the shares (i.e. including any tax liability that
arises). This does not include any unvested STI equity or LTI awards.
Section 2.6

Fletcher Building Limited Remuneration Report 2026 22

6. EMPLOYEE REMUNERATION
Section 211(1)(g) of the Companies Act 1993 requires disclosure of the number of employees or former employees of the Group
whose remuneration and any other benefits received by them during the year in their capacity as employees, was equal to or
exceeded $100,000 per annum and to state the number of such employees or former employees in brackets of $10,000. These
amounts are included below and include all applicable employees or former employees of Fletcher Building worldwide. The
remuneration amounts include all monetary amounts and benefits actually paid during the year, including redundancies, the face
value of Long-Term Incentives vested, and amounts that relate to prior periods (due to timing of payments).
From NZD to NZD
New Zealand
business
activities
International
business
activities Total

From NZD to NZD
New Zealand
business
activities
International
business
activities Total
100,000 – 110,000
665 215 880

420,000 – 430,000
2 0 2
110,000 – 120,000
521 227 748

430,000 – 440,000
4 2 6
120,000 – 130,000
445 245 690

440,000 – 450,000
2 1 3
130,000 – 140,000
342 190 532

450,000 – 460,000
2 1 3
140,000 – 150,000
230 168 398

460,000 – 470,000
1 0 1
150,000 – 160,000
172 140 312

470,000 – 480,000
1 1 2
160,000 – 170,000
141 119 260

480,000 – 490,000
2 5 7
170,000 – 180,000
96 118 214

490,000 – 500,000
0 2 2
180,000 – 190,000
92 96 188

500,000 – 510,000 2 2 4
190,000 – 200,000
69 90 159

510,000 – 520,000 1 2 3
200,000 – 210,000
50 60 110

520,000 – 530,000 1 0 1
210,000 – 220,000
51 59 110

530,000 – 540,000 0 2 2
220,000 – 230,000
32 38 70

540,000 – 550,000 2 0 2
230,000 – 240,000
36 33 69

610,000 – 620,000 1 1 2
240,000 – 250,000
15 26 41

630,000 – 640,000 1 1 2
250,000 – 260,000
22 26 48

640,000 – 650,000 1 0 1
260,000 – 270,000
18 17 35

690,000 – 700,000 2 0 2
270,000 – 280,000
14 8 22

720,000 – 730,000 0 1 1
280,000 – 290,000
12 13 25

750,000 – 760,000 1 0 1
290,000 – 300,000
12 11 23

770,000 – 780,000 1 0 1
300,000 – 310,000
7 10 17

780,000 – 790,000 1 0 1
310,000 – 320,000
9 6 15

820,000 – 830,000 0 1 1
320,000 – 330,000
4 6 10

830,000 – 840,000 1 0 1
330,000 – 340,000
8 4 12

930,000 – 940,000 1 0 1
340,000 – 350,000
8 2 10

980,000 – 990,000 1 0 1
350,000 – 360,000
8 6 14

1,000,000 – 1,010,000 1 0 1
360,000 – 370,000
3 6 9

1,030,000 – 1,040,000 1 0 1
370,000 – 380,000
6 2 8

1,100,000 – 1,110,000 0 1 1
380,000 – 390,000
5 2 7

1,380,000 – 1,390,000 1 0 1
390,000 – 400,000
2 2 4

1,450,000 – 1,460,000 1 0 1
400,000 – 410,000
3 1 4

1,700,000 – 1,710,000 1 0 1
410,000 – 420,000
3 0 3

2,190,000 – 2,200,000 1 0 1



Total
3,138 1,969 5,107
The FY26 highest-paid employee population includes two leaders in the Construction Division (now divested) who received one-
off project completion incentives related to the New Zealand International Convention Centre (NZICC). These incentives were
established to retain key leaders over a six-year period to deliver NZICC through recovery, remediation and completion. The
leaders successfully led the project to practical completion and handover, achieving a critical milestone for Fletcher Building.
The number of individuals above $1million in FY26 is 7 (compared to 17 in FY23, 9 in FY24 and 13 in FY25).