Good morning, everyone. My name is Doug McTaggart, and I am Chairman of The Lottery Corporation Limited. On behalf of the board, I warmly welcome you to the company's 2026 Annual General Meeting. I begin by acknowledging the traditional custodians of the land on which we are meeting today, the Gadigal people of the Eora Nation, and I pay my respects to their elders, past and present. I will now introduce our board. Wayne Pickup, our Managing Director and CEO. Next to Wayne is Anne Brennan, independent non-executive director and chair of our audit committee. To Anne's left is John O'Sullivan, independent director and chair of our risk and compliance committee. Harry Boon, next to John, non-executive director and chair of our people and remuneration committee. Harry retires immediately after the meeting today.
Tim Poole comes next, independent non-executive director, and the incoming chair of our people and remuneration committee following Harry's retirement. Down at the end, next to Tim, sits Megan Quinn. It is a long table, Megan. Independent non-executive director. Last but certainly not least, our director from the U.S., Stephen Morro, independent non-executive director. Next to me is Genevieve Ryan, our company secretary. We have with us the members of our leadership team. I hope you have met some of them before, and if not, I will introduce them now. I will ask them to stand as I introduce them. Adam Newman, our Chief Financial Officer. Callum Mulvihill, our Chief Operating Officer, Lotteries. Loren Somerville, our Chief Operating Officer, Digital. Antony Moore, our Chief Operating Officer, Keno. Rob Ure, our Chief Strategy Officer. Michelle Williams, our Chief People and Brand Officer.
As you can see by their titles, it reflects our new operating structure, which our CEO will talk about. There is a quorum of shareholders present today, and I declare the 2026 Annual General Meeting open. A notice of meeting has been distributed to shareholders, and I will take it as read. Before we start, I will hand over to our company secretary to take us through the meeting procedures.
Good morning, everyone. It is a pleasure to welcome you to our AGM. Before we move to the formal business of the meeting, I will outline the procedures for today's meeting. Could I please ask that all phones are switched off or on silent, and that no photographs or recordings are taken of the meeting. A recording of the presentations will be made available on our website shortly. Shareholders and proxies who are here in Sydney today will have received an admittance card. A yellow card was issued to shareholders and proxies entitled to vote and speak. A blue card was issued to shareholders who are entitled to speak but not vote. Visitors have been issued a white card. I remind visitors that they are not entitled to speak or vote today.
Shareholders will be given a reasonable opportunity to ask questions and make comments as each item of business is considered. Please ensure that your question or comment is relevant to the item of business and to shareholders as a whole. If you wish to ask a question or make a comment, please make your way to a microphone if you are able. Otherwise, raise your hand and a microphone will be brought to you. Please show your blue or yellow card to the relevant team member, and once invited, introduce yourself, including the shareholder you represent if you are a proxyholder. To ensure as many shareholders as possible have the opportunity to participate, we respectfully ask that questions per agenda item are limited to two per shareholder. Thank you to those shareholders who have submitted questions before the meeting.
Some of those questions will be answered through the Chairman or CEO addresses, both of which have been released to the ASX before today's meeting. Voting on all resolutions will be conducted by a poll. Rachel Teo of MUFG Corporate Markets, the company share registry, will act as returning officer for the conduct of the poll and will collect your voting cards at the end of the meeting or before if you need to leave early. The Chairman will declare when voting is open. Details of the proxies received before the meeting in relation to each resolution will be shown on the presentation slides after discussion on that item. The results of the poll will be made available on the company and ASX websites later today. If there are any procedural aspects you are uncertain about, please ask one of the share registry team members.
That covers the logistics of the meeting today, and I will now hand back to the Chairman.
Thank you, Genevieve. Now I will give you my assessment of the year. Sydney is a fitting and a fitting place to reflect on what this industry makes possible. From helping fund the construction of the Sydney Opera House to supporting hospitals across New South Wales, Lotteries has had a long and lasting impact on the communities in this country. Today, that legacy continues. Every week, millions of Australians play for the chance of a life-changing win, and the enduring connection between lottery proceeds and public good remains central to our purpose today. Turning to the 2026 financial year, in a year of unusually low jackpot activity, The Lottery Corporation delivered a resilient result. During the year, Powerball and Oz Lotto experienced an exceptionally soft year for big jackpots, an outcome expected only once in every 45 years.
It was the first time in five years that Powerball did not jackpot to AUD 100 million, and the first time in nine years that Oz Lotto jackpot did not get to AUD 50 million. Current events notwithstanding, things might turn. We will see. Naturally, that had a short-term impact on turnover and customer numbers, but when you look at the numbers over the longer term, jackpot runs tend to balance out over time, as we are seeing now. Pleasingly, the underlying business continued to perform very well. Strong cash generation discipline, cost management, and the diversity of our portfolio across games, channels, and customer segments helped offset the unusual jackpot environment and provide stability throughout the year. This resilience, which is a key feature of the company's business model, gave the board confidence to maintain the full-year ordinary dividend at AUD 0.165 per share, in line with fiscal 2025.
We remain well-positioned for the future as a compelling long-term investment proposition, supported by our long-dated licenses, leading brands, a national retail network, growing digital presence, and the strong ability to generate cash. FY 2026 was also a year of significant transition and progress as we position the business for its next phase of growth. Following Sue van der Merwe's retirement, Wayne Pickup joined as Managing Director and CEO in November. Wayne brings extensive global lottery experience spanning 25 years and was most recently CEO of Allwyn North America. We will hear from Wayne shortly. Supporting the CEO, the board endorsed a refreshed strategy and operating model to sharpen accountability, simplify operations, and support long-term growth. The most significant strategic achievement of the period was securing the 40-year extension of our Victorian Lotteries license through till 2068. Victoria represents around 30% of our lottery's turnover.
This extension aligns Victoria more closely with our broader portfolio of long-dated licenses and provides certainty for decades to come. It also allows us to plan and invest with confidence, benefiting shareholders, the state, our retail partners, and the Victorian community supported by our lottery proceeds. As part of the financing the lottery extension, we successfully raised AUD 800 million through an Australian medium-term note issue, The Lottery Corporation's inaugural debt capital markets transaction. The strong support from institutional investors reflected confidence in our infrastructure-like cash generative business model and our long-term future. The transition expands our funding base, enhances debt capital diversification, and supports our long-term funding requirements, and we are grateful for the market's support. Board renewal remains an important part of maintaining strong governance and ensuring we continue to strengthen the mix of skills, experience, diversity, and perspectives around the board table.
I can assure you, there are many perspectives we discuss and debate along the way. As previously announced, Harry Boon will retire from the board at the conclusion of today's meeting. Harry has made a significant contribution to The Lottery Corporation and its forerunner businesses, having joined the board of the Tatts Group in 2005 and seen through the establishment and evolution of the company as a standalone ASX-listed business. On behalf of the board, Harry, I extend our sincere thanks for your contribution and wish you well in your well-earned retirement. Following Harry's departure, Tim Poole will succeed Harry as chair of the People and Remuneration Committee. Throughout fiscal 2026, the board maintained close oversight of the company's strategic direction, risk management framework, and stakeholder engagement, as well as engagement on regulatory and policy developments shaping the lottery sector.
Federal gambling reforms recently passed by the federal government during the year, including measures to ban online Keno and foreign match lotteries beginning January 1 next year. These reforms enhance consumer protections, strengthen the integrity of regulated markets, and support the lottery industry's long-term sustainability. I have to say, our team contributed well working with the federal government to get these laws passed. In closing, I would like to thank our people, the senior leadership team, and my fellow directors for their dedication and contribution through FY 2026. Even in an unusually low year for jackpots, the resilience of the underlying business shone through and enabled us to hold the dividend. We displayed cost and capital discipline that you can expect from us as we focus on delivering long-term value for you, our shareholders. It was also a year in which we strengthened the company's long-term foundations.
Our license portfolio is stronger, our strategic direction is clear, our balance sheet remains strong, and we are well-positioned to deliver sustainable value for shareholders over the long term. Thank you for your ongoing interest and support. I will now hand over to our Managing Director and CEO, Wayne Pickup, to address the meeting. Thank you.
Thank you, Doug, and good morning, everyone. I appreciate the opportunity to address you today. When I joined The Lottery Corporation a year ago, I saw a business with strong fundamentals, trusted brands, long-dated licenses, a national retail and venue network with millions of Australians who choose to play with us. I also saw there was an opportunity to build on those strengths and evolve the business for how Australians want to play today and into the future. To evolve from being a lottery operator to a digitally led entertainment company. Over the past year, we have taken important steps towards that goal. We refreshed our strategy, introduced a new operating model, and moved quickly into execution.
As Doug outlined, in FY 2026, our jackpot games didn't reach those very large offers. The AUD 100+ million for Powerball or the AUD 50+ million for Oz Lotto, where turnover grows the fastest.
This lean run impacted turnover by an estimated AUD 700 million versus model expectations. You can expect this variability to even out over time. Against that backdrop, the group delivered AUD 3.6 billion of revenue, AUD 736 million of EBITDA before significant items, and maintained total ordinary dividends at AUD 0.165 per share. A payout ratio of 107% of NPAT, reflecting the financial power of this business. From FY 2027, we'll move to a payout ratio based on NPAT, pre-significant items, and adding back license amortization after tax. A more cash-based measure that fully reflects our cash generative nature and supports the consistent, reliable dividends that are a critical element of our capital management framework. More importantly, its momentum in pricing, base game participation, and digital share that matters more to the long-term trajectory. Encouragingly, these indicators continue to move in the right direction.
We've also achieved excellent price retention from pricing changes to our two biggest games, Saturday Lotto and Powerball. Turnover in base games grew 5.6%. Digital share of lottery sales continued to increase, growing 90 basis points. Keno delivered another record result. Operating costs reduced, driven by disciplined cost management, including the benefit of our ongoing optimization activities. Structural changes to our cost base are giving us room to invest in areas where we can drive growth and better returns on capital, like digital, AI, product, and the customer experience in retail. When we evaluate our business, we look through the short-term variability with a firm view on long-term value creation. FY 2026 was a year of preparing the business for its next chapter of growth by refreshing the strategy. We simplified the organization and sharpened our focus on the areas where we can create the most value.
Our strategy is focused on three priorities: strengthening our domestic position in lotteries and Keno, leading in digital entertainment, and building a high-performance enterprise. Looking back, I am pleased with the progress we have made as we began executing against these priorities. Among our achievements, we're securing the long-term extension of our Victorian license, continuing to optimize our game portfolio, and progressing initiatives to support sustainable growth. Our lotteries portfolio is strong and diverse, but game innovation and evolution will always be an important growth lever. We have a proven and repeatable playbook where we evolve the portfolio by cyclically changing a game subscription price and lifting prizes. The change to Powerball last November increased prizes across all divisions and was enabled by a price change. It's working as planned. We completed the design and development of a refresh of Set for Life, which launched last month.
Winners now receive an additional AUD 200,000 up front in Division One and a further AUD 20,000 in Division Two. The change is supported by a AUD 0.10 per game price increase and is designed to enhance the value proposition while supporting long-term growth. We're seeing good early retention of this Set for Life price change. As we look ahead to FY 2027, we will strengthen our core lotteries business, and we see a timely and compelling opportunity to optimize Oz Lotto. Oz Lotto plays an important part in the portfolio as one of our two jackpot games alongside Powerball. We're targeting a price and matrix change for the second half of calendar year 2027, subject to all approvals. We also see more opportunity in daily and instant games and improving the retail experience. Growing our customer base and deepening customer engagement is now a core focus for the business.
We are laser-focused on understanding our customers, how engaged they are, and where we can create value. We have set ourselves a very simple target of having more customers playing our games more often. We already have more than 4 million Australians who play our games each year and are not registered. To make it easier for customers to play and stay connected with us, we have introduced initiatives such as Check & Collect and ticket-based QR code membership sign-ups. Keno's recent growth story continued in FY 2026. Pubs and clubs continue to experience good levels of footfall. Our aim has been to gain share of wallet by making the in-venue experience more visible and more engaging.
The recent Federal gambling reforms mean online Keno will no longer be permitted from next year, and we expect the full year impact for us will be circa AUD 25 million of EBITDA based on FY 2026. This does not change, however, is the strength of our retail Keno business. Keno is firmly anchored in Australia's pubs and clubs, and that's where our vast majority of our customers play. Our response will be to double down on Keno in venues, making it more social, engaging, and available. Our planned bring your own device capability will give customers more choice in how they play Keno within venues, while also supporting venue expansion opportunities. We also continue to invest in new terminals, cashless payment options, and the underlying technology platform. Turning to digital, what I see as our biggest growth opportunity, this is about more than selling tickets online.
It's about creating an entertainment experience that customers want to come back to. The recent launch of the Draw Reveal and Play Pick within The Lott app are examples of what we're talking about here. These features make playing lotteries through The Lott app a more playful and entertaining experience, not simply a functional one. Initiatives such as digital gifting, syndicates, and other ways for customers to play and share experiences can make lottery play even more social and interactive. The third pillar of the strategy is building a stronger and sharper enterprise. This is about modernizing our operations, maintaining strong expense and capital discipline, and ensuring we have the capabilities, systems, and culture to deliver sustainable long-term growth. Over the past year, we have evolved our operating model to be simpler, more focused, and more accountable, improving decision-making, accountability, and pace across the business.
The value created by The Lottery Corporation extends well beyond the enterprise. Most of every dollar spent on lottery and Keno products flows back into the Australian economy. In FY 2026, over AUD 5 billion was paid in prizes, and AUD 1.7 billion was paid in taxes and duties to state and territory governments. We also paid AUD 637 million in commissions to our retail and venue partners, who are mostly small- and family- businesses such as news agencies. Those funds help support essential government services, local businesses, and jobs in communities. We also contributed more than AUD 5 million to community organizations, supporting initiatives such as health, medical research, education, homelessness, mental health, arts and culture, and the environment. It's an important part of who we are and the role we play in Australian communities, and we are proud of our contribution.
Just as important is maintaining the trust customers place in our brands. During the year, we continued to strengthen our responsible play initiatives, investing in customer support tools, data-led interventions, and gambling harm research. Operating responsibly is fundamental to maintaining our social license and supporting long-term growth. Looking ahead, our direction is clear. We have a strong core, leading brands, and long-dated licenses. The Victorian license extension to 2068 further strengthens our infrastructure-like characteristics. We have an extensive retail and venue network and millions of Australians who choose to play with us. Our job is now to build on those strengths. In lotteries, it's investing in product and marketing to drive participation and know more customers. It's about continuing to invest in retail and that critical connection between the retailer and the customer.
In digital, we have a strong pipeline of initiatives backed by a new team, and we are investing confidently in Keno, rebuilding it around pubs and clubs to make it more entertaining and deliver simple social play. These are our opportunities, and it is how we will become where Australia comes to play. As for the first three months of FY 2027, Division One offers for our jackpot games have been below modeled outcomes. Overall, the underlying health of the business remains strong, and we will continue to manage the business for the long term. We are pleased to see Powerball roll through to AUD 100 million for tomorrow night, our first such draw in 16 months, despite statistical expectations being for three such draws every 12 months.
We are encouraged by sales, digital share, and the new signups we have seen to date, whilst noting that half of our sales typically occur in the last 24 hours leading up to a draw. These big draws are important, not just for sales, but are attracting attention and new customers to the category. Finally, and very importantly, I want to thank our people for their hard work throughout the year, and thank our Board and shareholders for your ongoing support. We have a strong business, a clear strategy, and a significant opportunity ahead of The Lottery Corporation. I thank you.
Okay, now we come to the formal business of today's meeting. The notice of meeting outlines all the items of business to be considered. The Board recommends that shareholders vote in favor of each resolution. I confirm that I hold all available undirected proxies and will vote all available proxies in favor of each resolution. May I please ask that you keep your questions relative to the agenda items on hand. The first item on the agenda is to receive and consider the financial report and other formal reports for the financial year ended 30 June 2026, which have been made available to shareholders. There is no vote on this item. However, in a moment I will respond to questions submitted before the meeting on these reports and on the performance of the company to the extent that they have not already been addressed.
I will then invite questions from the floor. Michael Collins from Ernst & Young, sitting down here in front, is available to answer questions about the FY 2026 audit. I will now ask the Company Secretary to read out the questions received before the meeting. Thank you, Gen.
Thank you, Chairman. We have received four questions on this agenda item. The first question is from Mr. David Bryce, and his question is d oes TLC see some of these worldwide lottery advertisements and some of the mega draws in the U.S.A., for example, as a threat to the TLC business model? Or does TLC see much of the buying of TLC offerings likely to continue to be locally focused?
Thank you for your question, Mr. Bryce. We recognize that very large international jackpots can attract consumer attention, but Australian customers know our brand and trust our games. It is not clear to me that that is the case with some of these what we call foreign match lotteries. The infrastructure behind them can be somewhat opaque. The recent federal gambling reforms will ban all electronic lotteries, including foreign match lotteries, based on international draws from January 1 in 2027. Our focus remains on responsible play and on continuing to keep our products and customer experience relevant and compelling.
The next question is from Ms. Natasha Lee. Her question is: I note that a number of female non-executive directors does not meet world's best practice of at least 40%. Well-performing boards generally reflect the wider community. Will the company be addressing gender diversity as well as a lack of other types of diversity on the board?
Thank you for your question, Ms. Lee. It's a question I get a lot these days. The recent reduction in percentage of females on the board essentially reflects the departure of our previous CEO, Sue van der Merwe, to Wayne Pickup. There's clearly a change in gender there. We remain committed to our inclusion and belonging policy goal to establish an inclusive workforce that reflects our diversity of the community and committed to our 40% gender diversity target. We're going through a board renewal process now, and as you can imagine, that policy, that goal, is top of mind. Any director recruitment being undertaken, it will be consistent with our policy while ensuring that we get the right skills and experience added to the board as appropriate for what is a highly regulated business.
Below the board level, I might point out, nearly 44% of our senior leadership roles are held by women, and nearly 49% of roles across the workforce are held by women. So we do take gender diversity seriously. We just need to address that on the board.
Thank you, Chairman. We have another question from Ms. Lee, and her question is: I note KPMG undertakes an internal auditor role. How long has this arrangement been in place, and is this being reviewed as a risk management issue?
Thank you for your additional question, Ms. Lee. KPMG has assisted The Lottery Corporation since its ASX listing by providing specialist expertise to help us to deliver the board-approved risk-based internal audit plan, initially under a co-sourcing agreement. This transitioned to a fully outsourced arrangement for the year 2025 fiscal year. The audit committee oversees the arrangement directly. It approves the internal audit plan and reviews the performance and independence of KPMG as an internal auditor. The audit committee is satisfied with the performance of KPMG and its independence is protected in three ways. KPMG is independent of our external auditor, Ernst & Young. Internal audit has unrestricted access to relevant company records, property, and people, and has direct access to the chair of the audit committee and chairman of the board.
We have one last final question received before the meeting from Mr. Peter Caliorio. His question is: How will the company commit to holding full hybrid meetings for future AGMs?
Thank you for your question, Mr. Caliorio. Yes, from next year, our AGMs will be held as hybrid meetings in Brisbane, so shareholders online can participate, including asking questions and vote online. I will now move to accepting questions from the floor. This is where you can ask any questions about the business and other matters relating to the business that are not covered in subsequent agenda items. It appears there are no questions, so that concludes this item of business, and we will move to the next item. The next items of business relate to the re-election of directors. As the next item of business relates to my re-election, I will ask Anne Brennan, the Chair of our audit committee, to assume Chair of this meeting. Anne, over to you.
Thank you, Doug, and good morning, ladies and gentlemen. This item of business is the re-election of Doug McTaggart as a director. Doug is Chairman of the Board and Chairman of the nominations committee. He brings extensive non-executive director experience together with a background in finance, treasury, risk, and compliance, all of which are of significant value to the company. The details of Doug's qualifications and experiences are set out in the notice of meeting, and I invite him to briefly speak to his re-election.
Thank you, Anne. Ladies and gentlemen, thank you for the opportunity to stand for re-election to the board of The Lottery Corporation. You first elected me in 2022. At that meeting, I discussed my background and diverse career experience. Variously, I have been an economics professor, an under treasurer for the state of Queensland, and longstanding CEO of Queensland Investment Corporation. Since 2012, I have had a non-executive director career sitting on the boards of listed entities UGL and Suncorp, I was there for 12 years. Chairman of Spark Infrastructure for five years before we was privatized and sold to private equity and delisted. I have chaired various other entities, including the Queensland Institute of Medical Research, the Investment and Financial Services Association, which is now the Financial Services Council, Suncorp, SunCentral Maroochydore, and the Queensland Public Service Commission.
Currently, I am a Director of Indigenous Business Australia, an organization committed to growing the economic independence of Aboriginal and Torres Strait Islander peoples. In 2024, with the support of the board, I was honored to step up and assume the chairmanship of this company. Since then, this wonderful business has completed separations from Tabcorp, successfully forged its own identity, and is seen in the market as a strong, reliable infrastructure-like business with highly defensive financial characteristics, including strong cash flow generation and low capital intensity. In opening my address, I noted some of the significant achievements TLC has achieved in 2026 in a difficult environment, and our CEO elaborated on these. Perhaps the most important thing a board can do is appoint the right CEO and providing that individual with the support necessary to be successful. I was proud to lead the board appointing Wayne Pickup.
In a short time, Wayne has sharpened our strategy and set the business up for a very successful delivery of that strategy. With your support, I would be further honored to continue to lead the board and support Wayne and the management group in continuing to deliver growth in shareholder returns and value in coming years. Thank you.
Thank you, Doug. I will now take questions on this matter. As there are no questions from the board, we have now finalized discussion on this item. Proxy votes in relation to the resolution are now shown on the slide. It seems from the votes received that this resolution will pass. Congratulations, Doug.
Thank you, Anne, and thank you, shareholders. We will now move to the next item of business, and this item relates to the re-election of Megan Quinn as Director. Megan has been a Non-executive Director since October 2022 and is a member of the People and Remuneration Committee and the Risk and Compliance Committee and the Nomination Committee. Megan's customer innovation, global brand, digital transformation, and multi-channel experience, together with her experience as a public company Director, we see to be of significant value to this business. The detail of Megan's qualifications and experience are set out in the notice, and I invite her to briefly speak on her re-election. Megan, over to you.
Thank you, Doug. Good morning, everyone. It's a pleasure to be sitting in front of you all today. The Board and management continue to be very ambitious for The Lottery Corporation. When I spoke with you two years ago, our focus was firmly on navigating an increasingly complex global environment, reinforcing our operational foundations, and positioning the organization for sustained resilience. Over the past two years, thanks to the dedication of our executive team in the past year with the commencement of our new CEO, Wayne Pickup, we continue to deliver on these commitments and are building a stronger, more disciplined enterprise. Today, we stand at a critical inflection point as we transition from foundation setting to executing our refreshed strategy.
My international experience as an entrepreneur, executive, advisor, and Board Director with companies across a range of industries ensures that I bring an agile perspective and a continuous improvement mindset to every discussion and decision. I've worked at the intersection of scale, transformation, and governance, and I understand firsthand what it takes to guide market-leading operations through structural shifts, regulatory complexity, and rapid market evolution. Like my fellow Directors, I'm committing to ensuring that our governance provides both the strategic challenge to stretch our aspirations and the disciplined oversight to ensure successful execution. We pride ourselves on the social license TLC has earned over the years. I believe that my diverse skill set and experience of the past 30 years put me in good stead to make a valuable contribution to The Lottery Corporation.
My focus remains on balancing conformance with performance, exemplary customer experience, multi-channel opportunities, innovation, agility, continuous improvement, and measured risk. With your support, I'd very much like to continue to focus on our ambitions to continue to create positive impacts and customer-centered initiatives to deliver long-term sustainable growth for The Lottery Corporation. Thank you.
Thank you, Megan. I will now take questions from the floor on this item. Are there any questions? As there are no more questions, we have finalized the discussion on this item. The proxy votes in relation to this resolution are now shown on the slide. It seems from the votes received that this resolution will pass. Congratulations, Megan. We now move to the next item of business. Item 3 is to adopt the 2026 Remuneration Report included in the company's 2026 annual report. The Board is committed to a remuneration framework that is focused on driving a performance culture over the short and long term. Our remuneration framework comprises a short-term incentive scheme with appropriate short-term performance measures and a long-term incentive scheme which aligns management reward with the outcomes of shareholders.
An STI, short-term incentive pool, only forms if the business meets its EBIT gate. Achieving at least 95% of target. Given the poor run of jackpots through this year, this hurdle was not met and no STI pool was formed. All has been revealed in the Remuneration Report itself. A remuneration framework review has commenced to ensure that our framework appropriately balances financial performance, strategic execution, shareholder alignment, and the attraction and retention of critical talent. Non-executive director remuneration, that is ours, remains unchanged since the company's initial ASX listing in 2022. The vote on this resolution is advisory only and does not bind directors or the company. However, the board will take into account the outcome of the vote and shareholder feedback when determining remuneration practices and policies for the future. I will now take questions on this item. Are there any questions from the floor?
Hello. Damien Straker from the Australian Shareholders' Association. Dr. McTaggart, ASA raised cash sign-on payments last year. Mr. Pickup received AUD 500,000 in cash within 10 days of starting. Why was it not paid in shares vesting over several years?
The payment was in lieu of, or to compensate the CEO for payments, which I believe are largely in cash, left on the table, leaving his former employment. We verified through our lawyers talking to his lawyers that was all as accounted for. It was paid in cash in order to get Mr. Pickup here and, as I say, to compensate him for what he left behind.
Great. Thank you.
Are there any further questions on the Remuneration Report? As there are no more further questions, we have again finalized discussion on this item. Proxy votes in relation to the resolution are now shown on the slide. It seems from the votes received that this resolution will pass. We now move to the next item of business. Item 4 is the proposed grant of performance rights to the CEO, Wayne Pickup, for fiscal year 2027 under the company's long-term incentive scheme. The board believes it is appropriate to award long-term incentive grants for achievement of challenging but attainable performance measures and conditions relative to total shareholder return and average return on invested capital, being the two performance measures, over a three-year period. This ensures alignment between long-term shareholder interests and the CEO's reward.
Given the commercially sensitive nature of the targets for a return on invested capital, ROIC, target and stretch targets will be published following the end of the performance period. In accordance with the formula set out in the notice of meeting, it is proposed to grant 493,381 performance rights to Wayne, which is the maximum number to be allocated and that would vest if service stretch performance conditions are achieved. Any performance rights that vest will be held under a holding lock of a further 12 months after that three-year period. I will now take questions from the floor on this item.
Mr. Chairman, half of Mr. Pickup's award depends on a return target that will not be published until 2029. Without giving the number, can you confirm it is set above what the company earns today?
The reason we don't publish those ROIC targets is this is not a very complicated business and analysts out there know a lot about us, including what our top line is, and they can reverse engineer those targets back to what the board has approved in its five-year plan. I can assure you that those targets are stretched, given the five-year plan that the board approves once every year. Yes.
Great. Thank you.
Are there any further questions from the floor on this item? As there aren't, it seems we've finalized discussion on the item. Proxy votes in relation to it are now shown on the slide. It seems this resolution too will pass. We will now move to the final item of the business. The last item of the business is to seek shareholder approval to reinsert the proportional takeover approval provision in the company's constitution. The directors consider that it is in the best interest of shareholders to approve this special resolution to provide all shareholders with the opportunity to vote on a proposed proportional or partial takeover of the company, whereby the bidder bids for a specified percentage of each shareholder's interests rather than all, should one occur during the next three years.
These provisions were last approved by shareholders at the AGM held on 1 October 2024, and unless renewed, will expire on 1 October 2027. I will now take questions on this agenda item. It seems there are no questions, and we have finalized our discussion on this item. Proxy votes for the resolution are shown on the slide. It seems that from the votes registered so far, this resolution will pass. That concludes the formal business of this meeting. If you haven't already done so, please submit your votes in respect of all resolutions now by using the paper voting card. On behalf of the board and management, I thank you for attending our annual general meeting and for your questions and comments, which have contributed to a brief but engaging discussion today, Mr. Straker.
Thank you again for your time and your continued support of The Lottery Corporation. We will continue to deliver value to you. I now declare the meeting closed. Please join the board and the senior management team outside for refreshments. Thank you very much.