Anglo American Annual Report 2012

4.3 Details of LTIP awardsgranted in 20124.3.1 TSR – Sector Indexcomparison• One quarter of the LTIP awardsgranted in 2012 vests according tothe Company’s three-year TSRperformance relative to a weightedbasket of international miningcompanies (the Sector Index).• The constituent companies of theSector Index for the 2012 awardsare shown in Figure 17a.• The Committee may amend thelist of comparator companies inthe Sector Index, and relativeweightings, if circumstances makethis necessary (for example, as aresult of takeovers or mergersof comparator companies orsignificant changes in thecomposition of the Group).• The Sector Index performancetargets and the vesting schedulefor the 2012 LTIP awards aresummarised in Figure 17b.• Target performance for theCompany requires the Company’sthree-year TSR to equal theweighted median TSR performanceof the Sector Index.• Maximum vesting occurs when theCompany’s TSR outperforms theweighted median TSR of the SectorIndex by 5% pa.Figure 17b: 2012 LTIP SectorIndex comparison(25% of total LTIP award)Vesting (% of LTIP Sector Index)100%30%0%Threshold: 0% pa Max: 5% paAnglo American’s 3-yearTSR out-performance of weighted sector median4.3.2 TSR – FTSE 100 comparison• One quarter of the LTIP awardsgranted in 2012 vests accordingto the Company’s three-year TSRperformance compared with theTSR performance of the constituentsof the FTSE 100 Index.• The FTSE 100 performancetargets and vesting schedule forthe 2012 LTIP awards are outlinedin Figure 18.The performance targets for bothTSR measures were calculated sothat there is approximately a 15%chance of achieving full vestingand a 25% chance of three-quartersvesting. These probabilities wereassessed by PwC using a MonteCarlo model.Figure 18: 2012 LTIPFTSE 100 comparison(25% of total LTIP award)Vesting (% of LTIP FTSE 100)100%30%0%Threshold: 50th Max: 80thAnglo American’s 3-yearTSR ranking vs FTSE 100 indexFigure 19: 2012 LTIPAOSC measure(50% of total LTIP award)0%Min: $4.6bnMax: $5.6bnAnglo American’s 3-yearAOSC savings ($bn)Vesting (% of total AOSC measure) 100%GovernanceFigure 17a: 2012 TSRSector IndexComparatorcompaniesMiningBHP Billiton plcTotal shareholder return for both theTSR measures is calculated basedon average returns over the fiveworking days immediately followingannouncement of the Company’sannual results. It is assumed that alldividends are reinvested.Rio Tinto plcTeck ComincoLimitedValeVedantaResources plcXstrata plcAnglo American plc Annual Report 2012 121