SMITH & NEPHEW PLC
21 May 2021
NOTIFICATION AND PUBLIC DISCLOSURE IN ACCORDANCE WITH THE REQUIREMENTS OF THE EU MARKET ABUSE REGULATION OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES ("PDMR") AND PERSONS CLOSELY ASSOCIATED WITH THEM.
On 21 May 2021 the following awards of US$0.20 ordinary shares (the "Shares") in Smith & Nephew plc (the "Company") were granted under the Smith & Nephew Global Share Plan 2020. The awards have been made in London and are based on the closing Share price on the London Stock Exchange on 20 May 2021 of £15.495.
1. PERFORMANCE SHARE PROGRAMME 2021 AWARDS GRANTED UNDER THE SMITH & NEPHEW GLOBAL SHARE PLAN 2020
The Remuneration Committee has approved performance conditions attached to the vesting of these awards, which are detailed below. These awards will vest on 21 May 2024 for the Executive Directors and 9 March 2024 for the other participants, subject to the achievement of the performance conditions which are measured over the period 1 January 2021 to 31 December 2023 as set out below.
The number of shares subject to the above awards are shown at target vesting. Should maximum vesting be achieved, participants will receive 2x the number of shares shown below. Participants will receive an additional number of shares equivalent to the amount of dividend payable per vested share during the relevant performance period.
The following relates to all individuals included in this section:
| Reason for the notification | |
| Initial notification /Amendment | Initial notification |
| Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor | |
| Name | Smith & Nephew plc |
| LEI | 213800ZTMDN8S67S1H61 |
| Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted | |
| Description of the financial instrument, type of instrument
| Smith & Nephew plc Ordinary Shares of USD 0.20 each
|
| Identification code | ISIN: GB0009223206 |
| Nature of the transaction | Performance Share Awards granted at target on 21 May 2021 under the Smith & Nephew Global Share Plan 2020. |
| Date of Transaction | 2021 - 05 -- 21 |
| Place of Transaction | London Stock Exchange (XLON) |
| Name (Position) | Director / PDMR | Price (£) | Volume | Aggregated information |
| Bradley Cannon (President Sports Medicine & ENT) | PDMR | 15.495 | 57,367 | N/A Single Transaction |
| Peter Coenen (President EMEA Region) | PDMR | 15.495 | 31,627 | N/A Single Transaction |
| Phil Cowdy (Chief Business Development & Corporate Affairs Officer) | PDMR | 15.495 | 25,605 | N/A Single Transaction |
| Roland Diggelmann (Chief Executive Officer) | Executive Director | 15.495 | 96,174 | N/A Single Transaction |
| Myra Eskes (President APAC Region) | PDMR | 15.495 | 32,625 | N/A Single Transaction |
| Simon Fraser (President Advanced Wound Management) | PDMR | 15.495 | 49,153 | N/A Single Transaction |
| Melissa Guerdan (Chief Quality & Regulatory Affairs Officer) | PDMR | 15.495 | 30,423 | N/A Single Transaction |
| Skip Kiil (President Orthopaedics) | PDMR | 15.495 | 70,367 | N/A Single Transaction |
| Elga Lohler (Chief HR Officer) | PDMR | 15.495 | 32,622 | N/A Single Transaction |
| Anne-Françoise Nesmes (Chief Financial Officer) | Executive Director | 15.495 | 51,468 | N/A Single Transaction |
| Catheryn O'Rourke (Chief Legal & Compliance Officer) | PDMR | 15.495 | 34,098 | N/A Single Transaction |
| Vasant Padmanabhan (President Research & Development) | PDMR | 15.495 | 31,967 | N/A Single Transaction |
| Susan Swabey (Company Secretary) | PDMR | 15.495 | 5,484 | N/A Single Transaction |
As explained on page 119 of the 2020 Annual Report the performance conditions applying to these awards have been determined by the Remuneration Committee having now had more time to understand how COVID-19 might impact upon our business between 2021 and 2023.
The awards made to the Executive Directors are subject to four equally weighted performance measures: Total Shareholder Return (TSR), Return on Invested Capital (ROIC), Global Revenue Growth and Cumulative Free Cash Flow. Page 119 of the 2020 Annual Report explains how TSR will be measured and defines the calculation of ROIC.
The awards subject to TSR will vest as follows. The two equally weighted peer groups are defined on page 119 of the 2020 Annual Report.
|
| Award vesting as % of salary at date of grant | |
|
| Sector based peer group | FTSE100 peer group |
| Below the index | Nil | Nil |
| Equaling the index | 8.6% | 8.6% |
| 8% above the index | 34.4% | 34.4% |
Awards will vest on a straight-line basis between these points. The maximum has been set significantly above target reflecting the maximum opportunity for outperformance.
The awards subject to ROIC will vest as follows:
| Return on Invested Capital Year ended 31 December 2023 | Award vesting as a % of salary |
| Below 9.8% | Nil |
| 9.8% | 17.2% |
| 11.8% | 34.4% |
| 13.8% | 68.8% |
Awards will vest on a straight-line basis between these points.
The awards subject to Revenue Growth will vest as follows:
| Three years ended 31 December 2023 | Award vesting as a % of salary |
| Below Threshold | Nil |
| Threshold (-8% of target) | 17.2% |
| Target - set by reference to our expectations | 34.4% |
| Maximum or above (+8% of target) | 68.8% |
Awards will vest on a straight-line basis between these points.
Revenue Growth targets for the three years ended 31 December 2023 for these awards, even though now determined, will not be disclosed until the 2023 Annual Report, when the Remuneration Committee will discuss performance against the target. It is not possible to disclose precise targets at the time of grant to avoid giving commercially sensitive information to our competitors concerning our growth plans.
The awards subject to Cumulative Free Cash Flow will vest as follows:
| Cumulative free cash flow Three years ended 31 December 2023 | Award vesting as % of salary |
| Below $1,370m | Nil |
| $1,370m | 17.2% |
| $1,712m | 34.4% |
| $2,054m | 68.8% |
Awards will vest on a straight-line basis between these points.
Susan Swabey
Company Secretary
Smith & Nephew plc
Tel: +44 (0)1923 477410
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