DEF 14A of Resmed Inc, Oct 5, 2023

DEF 14A of Resmed Inc

Filed Oct 5, 2023 · FY20230000943819-23-000019

Open on EDGAR

  1. How will I receive my proxy materials?

    | | Michael “Mick” Farrell has served as ResMed’s CEO and as a ResMed director since March 2013. He was appointed as chair of the board in January 2023. Mr. Farrell joined the company in 2000, serving as president of the Americas region from 2011 to 2013, senior vice president of the global sleep apnea diagnostic and therapeutic business from 2007 to 2011, and various senior roles in marketing and business development. Before joining ResMed, Mr. Farrell worked in management consulting, biotechnology, chemicals and metals manufacturing at companies including Arthur D. Little, Sanofi Genzyme, Dow, and BHP. Mr. Farrell has served on the board of directors of the Advanced Medical Technology Association (AdvaMed), an American medical device trade association since April 2015. He joined the board of Zimmer Biomet (NYSE: ZBH), a global provider of implantable musculoskeletal medical devices, and associated robotics and digital health technology in December 2014. Mr. Farrell is a member of two committees at Zimmer Biomet: the quality, technology and regulatory committee, and the compensation and management development committee, of which he is chair. Mr. Farrell also volunteers as a trustee for non-profit organizations: UC San Diego Foundation, Rady Children’s Hospital, and Father Joe’s Villages’ project for the homeless in San Diego, California. Mr. Farrell holds a Bachelor of Engineering with first-class honors from the University of New South Wales, a Master of Science in chemical engineering from the Massachusetts Institute of Technology (MIT), and an M.B.A. from the MIT Sloan School of Management. Mr. Farrell's skills, over 23 years of experience with ResMed and over 27 years of experience with healthcare and technology industries provides him with a unique and deep understanding of our operations, technology, and market, and led the board to the conclusion that he should serve as a director. As outlined in the board leadership structure discussion below, the board also believes it is appropriate for Mr. Farrell, as the chief executive officer, to serve as chair of the board of directors. |

  2. How will I receive my proxy materials?

    | | Peter Farrell is ResMed’s founder. He has been a director since ResMed’s inception in June 1989. Dr. Farrell served as CEO from July 1990 until December 2007, and from February 2011 until March 2013. He served as executive board chair from December 2007 until February 2011, and from March 2013 through December 2013. Since January 1, 2014, he has been a non-officer employee of ResMed. Dr. Farrell served as board chair until January 2023, when he became chair emeritus. Before founding ResMed, Dr. Farrell served as vice president of research and development at various subsidiaries of Baxter International, Inc. (NYSE: BAX), from July 1984 to June 1989, and managing director of the Baxter Center for Medical Research Pty Ltd. from August 1985 to June 1989. From January 1978 to December 1989, he was foundation director of the Graduate School for Biomedical Engineering at the University of New South Wales where he currently serves as a visiting professor and as chair of the UNSW Centre for Innovation and Entrepreneurship. He served on the Visiting Committee of the Harvard/MIT Health Sciences & Technology Program from 1998 through 2018, and currently serves on the MIT Dean of Engineering’s Advisory Council. Dr. Farrell serves as independent board chair at Arcturus Therapeutics Holdings Inc. (NASDAQ: ARCT)where he is a member of the compensation and nominating and corporate governance committees. He is currently on the board of Evolus, Inc. (NASDAQ:EOLS) where he is a member of the audit and the nominating and governance committees. He currently sits on two faculty advisory boards at the University of California, San Diego: the Rady Business School and the Jacobs Engineering School. He is also chair of WaveGuide, a startup leveraging nuclear magnetic resonance technology. He is on the Board of Trustees of Scripps Research and an active board member of both ProtoStar and Mikroscan. Dr. Farrell’s past board appointments also include director of NuVasive, Inc. (NASDAQ: NUVA) from 2005 through 2018. Dr. Farrell is a fellow or honorary fellow of several professional bodies. In 2012, he became an elected member of the US National Academy of Engineering and joined the board of trustees of Scripps Research. He was named 2005 U.S. National Entrepreneur of the Year for Health Sciences, 2001 Australian Entrepreneur of the Year, and 1998 San Diego Entrepreneur of the Year for Health Sciences. He has served on the Executive Council of the Division of Sleep Medicine at Harvard Medical School since 1998. Dr. Farrell has a B.E. in chemical engineering with honors from the University of Sydney, an S.M. in chemical engineering from MIT, a Ph.D. in chemical engineering and bioengineering from the University of Washington, Seattle, and a D.Sc. from the University of New South Wales. Dr. Farrell’s son, Michael Farrell, is ResMed’s chief executive officer and chair of its board of directors. Dr. Farrell’s role as our founder and chief executive officer for more than 20 years provides him with a unique and deep understanding of our operations, technology, and industry. In addition, his background reflects significant executive experience with other publicly-held medical technology companies and public company governance experience. These experiences and skills led our board to conclude that he should serve as a director. |

  3. How will I receive my proxy materials?

    | | Harjit Gill has served as a ResMed director since November 2018, and is a member of the audit and compensation committees. Since February 2019, Ms. Gill has served as CEO of the Asia Pacific Medical Technology Association (APACMed), the first and only regional association to provide a unified voice for the medical device, equipment, and in-vitro diagnostics industry in Asia Pacific. Since January 2022, Ms. Gill has been a director of Alticor Inc., a private holding company for Amway, a global leader in home, health, and beauty products. Since 2019 she has also been a member of the Innovation Board of Directors at MAS Holdings, one of the largest apparel tech companies in South Asia with over 115,000 people and a presence in 17 countries. From 2015 to 2016, Ms. Gill served as chief operations and marketing officer for HTC, Taiwan (OTCMKTS: HTCKF). From 1990 to 2015, she worked for Royal Philips (NYSE: PHG) in various roles. From 2012 to 2015, she was executive vice president and chief executive officer for Philips ASEAN & Pacific, based in Singapore, responsible for Healthcare/Lighting and Consumer Lifestyle. From 2009 to 2012, she was senior vice president of International Sales, and from 2006 to 2009, was vice president of Asia for Philips Consumer Lifestyle Products. Before 2006, she held progressive roles in the Netherlands, Hong Kong, Dubai, and Singapore for Consumer Electronics. From 2012 to January 2018, Ms. Gill served as a board member of the National University of Singapore, Entrepreneurship Committee. From 2012 to 2015, she was a board member of the Singapore International Chamber of Commerce. From 2017 to 2019 she was a member of the board of directors of Apollo Education and Training, a company providing English teaching in Vietnam. From 2014 to 2015 she was a member of the World Economic Forum South East Asia Council and in 2018 she was the Chapter Chair Gold of the YPO Singapore Chapter. From 2016 to 2019, she was an advisor to Delmedica Investments, a Singapore-based company focused on respiratory healthcare and inventors of the X-Halo breath thermometer. Ms. Gill has a Bachelor of Arts (honors) in combined studies from the University of Manchester. Ms. Gill’s executive and operational experience and skills led our board to the conclusion that she should serve as a director, particularly her background in consumer healthcare, her international experience, and her broad experience in sales, marketing and operations. |

  4. How will I receive my proxy materials?

    | | John Hernandez has served as a ResMed director since November 2021, and is a member of the compliance oversight committee. Since 2018, Dr. Hernandez has served as head of health impact at Google (NASDAQ: GOOGL), where he oversees clinical research, health economics and outcomes research. He joined Alphabet in 2016 where he has built and led teams at Verily and Google leveraging artificial intelligence to assist in promoting healthy lifestyles, diagnosing cancer, preventing blindness, among other things. Since May 2021, Dr. Hernandez has served as a director of Carmat, SA (ALCAR.PA), a French artificial heart company, publicly traded on the Euronext Paris exchange. He is a member of the audit and research and development committees. Before joining Verily in 2016, Dr. Hernandez was vice president of global health economics and outcomes research at Abbott Laboratories, a medical devices and healthcare company, from 2010 to 2016, and vice president of clinical research and health economics at Boston Scientific Corporation from 2001 to 2010. He has served in research and consulting roles at the RAND Corporation, Quintiles (now IQVIA), PwC and the American Society of Internal Medicine (now ACP). Dr. Hernandez held teaching and advisory positions with Stanford University from 2015 to 2019, University of Southern California from 2017 to 2019, and University of Washington from 2015 to 2018. Dr. Hernandez is widely published in scientific journals and lectures frequently on diverse topics including digital health strategy, health policy, health economics, healthcare technology assessment, value-based payments and real-world evidence strategies. Dr. Hernandez obtained his Bachelor of Arts from the University of North Carolina at Chapel Hill. He received a Master’s degree in health policy and a Doctorate of Philosophy at the RAND Graduate School in Santa Monica, CA. Dr. Hernandez’ experience in health economics and outcomes research in the medical device and digital health technologies industries led the board to conclude he should serve as a director. |

  5. How will I receive my proxy materials?

    | | Ronald “Ron” Taylor has served as a ResMed director since January 2005 and as independent lead director since July 2013. He is chair of the nominating and governance committee and a member of the audit and compliance oversight committees. In 1987, Mr. Taylor founded Pyxis Corporation, a manufacturer of automated drug dispensers for hospitals, where he served as chair, president, and CEO until its purchase by Cardinal Health, Inc., in 1996. For six years before founding Pyxis, Mr. Taylor was responsible for operations and international sales at Hybritech, Inc., a biotechnology company. Before joining Hybritech, he served for 10 years in management roles at Allergan plc (NYSE: AGN), a pharmaceutical company. From 1998 to 2001, he was a general partner at Enterprise Partners Venture Capital. Mr. Taylor’s past public company board experience includes serving as a director at Allergan from 1994 through 2018. From 1998 through 2014, he served as a member of the Red Lion Hotels governance, compensation, and audit committees. From 2002 until his appointment to the ResMed board in 2005, he served as chair of the ResMed Foundation. Mr. Taylor has a Bachelor of Arts from the University of Saskatchewan and a Master of Arts from the University of California, Irvine. Mr. Taylor’s background reflects significant executive and operational experience with publicly-held medical technology and pharmaceutical companies, including experience in evaluating and investing in healthcare companies as a partner in a venture capital firm, and public company governance experience. He has been a director of approximately 20 publicly and privately held companies over the past 27 years. In addition, he has more than 15 years of experience as a member of the Red Lion Hotel’s governance, compensation, and audit committees, and more than 20 years of experience as a member of the Allergan (formerly Watson and Actavis) audit, compensation, and governance committees. Mr. Taylor’s experience and skills as a public medical technology company CEO, venture capital experience, and board experience, led the board to the conclusion that he should serve as a director. As set forth below in the discussion of board leadership structure, Mr. Taylor also serves as our lead independent director, serving an important role advising our board and our chair of the board. |

  6. Pledging and hedging company stock prohibited

    | DIRECTOR COMPENSATION — 2023 |

  7. Fiscal year 2023 compensation process and peer group companies

    Fiscal year 2023 compensation process and peer group companies The board and compensation committee reviews director compensation each year. In May 2022, as part of this regular review, they considered FW Cook’s report covering cash and equity compensation, compared to a peer group of 20 medical device and medical technology companies in the US. The committee also considered additional market data from a group of 16 Australian-based peers. These groups were also used in reviewing ResMed’s executive compensation for fiscal year 2023. More information on the peer groups is included in the section in our Compensation Discussion and Analysis section entitled “Peer group comparisons.” Each year, the committee also considers the structure of our non-executive director equity program. Although our Australian peer group companies do not typically make equity grants to their non-executive directors, the practice is routine in the US. All but one of our US peers grant equity to their non-executive directors, and as of May 2022 (when the board made its director compensation decisions for fiscal 2023) approximately 95% of those granting equity used full value shares, while approximately 40% of US peers also granted stock options. Given this prevalence, and consistent with the US-based compensation philosophy described above, the board and compensation committee decided to continue the equity structure of ResMed’s non-employee director program. The board and compensation committee believe that the equity grants, coupled with our equity ownership guidelines, promote long-term ownership and align our directors with stockholders. After considering the FW Cook report regarding market competitiveness among US peer companies, the compensation committee recommended, and in May 2022 the board approved, an increase in the lead director and audit chair fees for fiscal year 2023, effective as of July 1, 2022, as shown in the table below. No changes were made to the equity component of the director compensation program. The equity component of the director compensation program was last changed in 2010.

  8. Fiscal year 2023 compensation process and peer group companies

    | Position | 2023 Retainer Fee | Increase | Previous Fee | | Non-executive directors | $70,000 | no change | $70,000 | | Lead director | $37,500 | $12,500 | $25,000 | | Audit chair | $25,000 | $5,000 | $20,000 | | Compensation chair | $20,000 | no change | $20,000 | | Compliance oversight chair | $15,000 | no change | $15,000 | | Nominating & governance chair | $15,000 | no change | $15,000 |

  9. Fiscal year 2023 compensation process and peer group companies

    Our 2009 Incentive Award Plan sets a $700,000 annual limit on combined cash and equity compensation for service as a non-employee director. During fiscal year 2023, the combined cash and equity compensation paid for service to our non-employee directors ranged from $293,725 to $372,560 per person. The compensation committee and board will continue to monitor compensation trends, competitive practices, tax regulations, and other matters related to non-executive director compensation, and adjust as appropriate.

  10. New directors

    New directors We grant pro-rated equity awards and provide pro-rated cash retainers for all new and departing directors (for the period between their start date and the next annual meeting, or between the grant date and end of service period, respectively). We do not provide new directors with any initial inducement equity awards that are in addition to the pro-rated annual grant amount.

  11. Chair emeritus compensation

    Chair emeritus compensation Since January 2014, Peter Farrell has served as both a director and a non-officer employee of the company. Dr. Farrell receives separate compensation for each of these roles. In January 2023, Dr. Farrell ceased service as chair of the board, and became chair emeritus of the board. During fiscal year 2023, as our non-executive chair for part of the year and as chair emeritus for the remaining portion, he was provided the regular board retainer of $70,000, and the regular board equity grant with a value of $250,000, on the same terms as the other non-executive board members. Dr. Farrell does not serve on any board committees. During fiscal year 2023, in connection with his service as a non-officer employee, Dr. Farrell was paid an annual salary of $300,000, which was the same as the annualized salary he began receiving in January 2014, when he transitioned into the role of non-officer employee. Dr. Farrell is not eligible to participate in the annual short-term incentive program or the long-term incentive equity programs that we provide to our employees. During fiscal year 2023, as in prior years, we also provided benefits and perquisites to Dr. Farrell, in his role as non-officer employee, that were broadly consistent with those provided to our executive officers, as described in the “Compensation Discussion and Analysis.” The incremental cost to us for these benefits is described in the fiscal year 2023 compensation table below. In addition to the same change of control benefits provided in all director equity grants, described above in “Fiscal Year 2023 Program - Equity,” we continue to have an agreement with Dr. Farrell that provides him with additional benefits, as an employee, in the event of a change of control. Consistent with our policy for executive officers, all of Dr. Farrell's benefits are on a “double-trigger” basis, that is, benefits will only accrue if we terminate Dr. Farrell’s employment, or if he resigns for good reason, but in either case within a specified period of time before or after a change of control. If Dr. Farrell’s employment were to terminate under qualifying circumstances in connection with a change of control, then at the time of termination: (1) he would receive a severance payment equal to (a) two times his employee salary, plus (b) two times the amount we would be required to contribute on his behalf under our 401(k) plan based on his termination base salary; (2) he would become fully vested in his accrued retirement plan benefits; (3) all his unvested equity awards would vest in full; and (4) we would provide medical and dental health benefits for two years after the termination. The agreement does not include excise tax gross-ups; instead, it includes a “best pay” provision, reducing severance payments to the extent necessary so that no portion of any payments or benefits payable upon a change of control would be subject to excise tax if the reduction would result in the net amount payable to him being greater than the net amount received without the reduction. For two years after a qualifying termination in connection with a change of control, Dr. Farrell will be prohibited from inducing any person in our employment to terminate employment or accept employment with anyone other than us or, subject to certain limited exceptions, engage in any business or activity or render any services or provide any advice to any person, activity, business or entity that directly or indirectly competes in any material manner with us or meaningfully support any person, business, entity or activity, or initiate or further that business or activity. The restriction on post-termination employment will not apply to him if he is residing in California, to the extent the restriction is not consistent with California law. In addition, as a condition to payment and providing any benefits under the agreements, he must deliver a general release of claims in favor of us. In May 2023, our board (without Michael Farrell’s or Peter Farrell’s participation) determined that the compensation arrangements for Dr. Farrell, as a non-officer employee, will remain the same for fiscal year 2024 as in fiscal year 2023, and that he will receive an increase in director compensation consistent with the other directors.

  12. Fiscal year 2023 director compensation table

    Fiscal year 2023 director compensation table The table below summarizes the compensation received by our non-executive directors for the fiscal year ended June 30, 2023.

  13. Fiscal year 2023 director compensation table

    | Director | Fees earned or paid in cash(a) | Restricted stock units(b)(c) | Other compensation(d) | Total(i) | | Carol Burt | $110,000 | $250,060 | | $360,060 | | Jan De Witte | $70,000 | $250,060 | | $320,060 | | Karen Drexler | $70,000 | $250,060 | | $320,060 | | Peter Farrell | $70,000 | $250,060 | $360,209 | $680,269 | | Harjit Gill | $70,000 | $250,060 | | $320,060 | | John Hernandez | $70,000 | $250,060 | | $320,060 | | Richard Sulpizio | $90,000 | $250,060 | | $340,060 | | Desney Tan | $70,000 | $250,060 | | $320,060 | | Ronald Taylor | $122,500 | $250,060 | | $372,560 |

  14. Fiscal year 2023 director compensation table

    (a)Each director was also reimbursed for expenses incurred for attending meetings (although these amounts are not reflected in the table above). (b)The dollar value of the RSUs shown represent the grant date fair value of the 1,122 stock awards granted, computed in accordance with FASB ASC Topic 718, based on (i) the $224.58 closing stock price on November 16, 2022, the date of the grant, rounded to the nearest whole share, and (ii) the present value of lost dividends, resulting in a grant date fair value per share of $222.87. (c)The following table sets forth the number of options (both exercisable and unexercisable) and RSUs held by each of our non-employee directors and Dr. Farrell as of June 30, 2023, the end of fiscal year 2023:

  15. Fiscal year 2023 director compensation table

    | Director | Options outstanding at fiscal year end | Restricted stock units outstanding at fiscal year end | | Carol Burt | 0 | 1,122 | | Jan De Witte | 0 | 1,122 | | Karen Drexler | 7,892 | 1,122 | | Peter Farrell | 13,137 | 1,122 | | Harjit Gill | 0 | 1,122 | | John Hernandez | 0 | 1,122 | | Richard Sulpizio | 0 | 1,122 | | Desney Tan | 0 | 1,122 | | Ronald Taylor | 0 | 1,122 |

  16. Fiscal year 2023 director compensation table

    (d)Other compensation represents Dr. Farrell’s total compensation for fiscal year 2023 for service as a non-officer employee, as shown in the following table(i):

  17. Fiscal year 2023 director compensation table

    | Salary | Company contribution to 401(k) plan | Supplemental life and disability insurance premiums | Sales incentive award(ii) | Sales incentive award tax gross-up(ii) | Total compensation(i) | | $300,000 | $13,200 | $30,250 | $13,670 | $3,089 | $360,209 |

  18. Fiscal year 2023 director compensation table

    i.We participate in an aircraft travel program to provide for more efficient use of time and to provide a more confidential and secure travel environment in which to conduct company business. This program is used primarily for business purposes, but is available to Dr. Farrell for personal use, consistent with the benefit we make available to our chief executive officer and our president and chief operating officer. During fiscal year 2023, Dr. Farrell did not utilize the aircraft for personal use. ii.Amounts represent the cost of participation by Dr. Farrell in our sales incentive award travel program, which is available to sales, marketing, and other non-executive employees. The cost includes the incremental cost to us of travel, hotel, meals, entertainment and other expenses of Dr. Farrell and his spouse or guest. The cost shown as gross-up represents the amounts we reimburse for the tax associated with income imputed to Dr. Farrell in connection with the program. We provide tax gross ups to all employees who participate in this program. Attendance is part of Dr. Farrell's duties and enhances the effectiveness of the sales incentive program.

  19. Fiscal year 2023 director compensation table

    | EXECUTIVE OFFICERS |

  20. Fiscal year 2023 director compensation table

    As of the record date our executive officers were:

  21. Fiscal year 2023 director compensation table

    | Executive officer | Age | Position | | Michael Farrell | 51 | Chair of the board and chief executive officer | | Lucile Blaise | 52 | President-sleep and respiratory care business | | Rob Douglas | 63 | President and chief operating officer | | Bobby Ghoshal | 55 | President-SaaS business | | Justin Leong | 46 | President – Asia and Latin America | | Michael Rider | 66 | Global general counsel and secretary | | Brett Sandercock | 56 | Chief financial officer |

  22. Fiscal year 2023 director compensation table

    David Pendarvis retired from his position as chief administrative officer, global general counsel, and secretary effective June 30, 2023.

  23. Overview of fiscal year 2023 – executive summary

    For a reconciliation between GAAP and non-GAAP measures, see the section “Reconciliation of non-GAAP financial measures” of this proxy statement. Under our annual cash incentive plan for fiscal 2023, our top-line results were slightly higher than our annual target for adjusted net sales, achieving 103.5% of our corporate target, and our bottom line results were roughly in line with our annual target for adjusted operating profit, achieving slightly more than 98% of our corporate target, achieving a weighted payout of almost 103% under our annual cash incentive program. In fiscal year 2023, we continued to make good progress with the three foundations of our ResMed 2025 strategy and in navigating the challenging clinical and economic environment: (1)Digital health technology leadership in our markets. Our digital health ecosystem is a competitive advantage that offers innovative solutions and integrated care to drive superior outcomes, experiences, and efficiency. As of 2023 fiscal year-end: •over 21.5 million of our 100% cloud-connectable devices have been sold into the global market (up from over 18 million at 2022 fiscal year-end); •our AirView patient management system had over 23.5 million patients (up from over 20 million at 2022 fiscal year-end); •approximately 6.5 million patients had signed up for myAir (up from over 4.5 million at 2022 fiscal year-end); and •our SaaS business systems had approximately 140 million patient accounts as part of our out-of-hospital SaaS offerings (up from 120 million at 2022 fiscal year-end). Our connected health strategy is advancing across multiple markets and we continued to add new businesses and technologies, including the acquisition in November 2022 of MEDIFOX DAN, a German leader in out-of-hospital software solutions. (2)Industry-leading innovation. During fiscal year 2023, we launched our new AirSense 11 sleep and respiratory care flow generator into several new markets and countries around the world, expanding its reach from its initial launch in the United States in fiscal year 2022. We also continued selling the re-engineered version of our existing AirSense 10 platform, the "card-to-cloud," to reduce the need for communications' semiconductor chips, which were in critically short supply during the prior fiscal year and continue to be supply constrained during fiscal year 2023. To meet the need for connected devices as a result of our competitor's recall, we also re-introduced connected AirSense 10 devices in some geographies. With increasing availability of communications semiconductor chips for AirSense 11 and AirSense 10 devices, we have discontinued manufacturing card-to-cloud devices. (3)Leadership to meet the challenges presented by competitive dynamics. We develop, attract, and recognize agile leaders who lead transformative change. These traits enabled us to respond quickly to provide solutions to help patients and healthcare providers grappling with the impacts of COVID-19, the new challenges of leading teams working in flexible and challenging working environments, and responding to a spike in demand caused by a competitor’s recall of flow generators. Throughout the year, we increased digital health technology and remote patient care services for our customers. At the same time, we remained focused on the ongoing delivery of world-leading products that treat sleep apnea, COPD, and asthma, and market-leading software that is used to care for more than 140 million people in skilled nursing facilities, nursing homes, hospice facilities, and the home. Improved absolute total stockholder returns; Creation of long-term stockholder value. Our total stockholder returns (TSR) on the NYSE and ASX were positive for the one-year period ending at 2023 fiscal year-end of June 30, 2023, an improvement when compared to the prior year negative 14% one-year TSR. On a relative basis, as of June 30, 2023, our one-year TSR was slightly below the median of our US peer group and below the median of our Australian peer groups, while our three-year TSR was below the median of our US peers and approximated the median of our Australian peers. However, our five-year TSR was in the upper quartile of our US peer group, higher than any of our Australian peers, and well above both the S&P 500 and the ASX 100. Our closing stock price on June 30, 2023 was $218.50 on the NYSE, and AUD $32.81 on the ASX. Our five-year absolute and relative TSR performance on both the US and ASX markets was strong, illustrating our focus on long-term value creation for our stockholders. The table below summarizes these results of our NYSE performance at fiscal year end. Our NYSE TSR was at the 47th percentile for the one-year period compared to our US peer group, and was higher than all but four US peers over the five-year period.

  24. Overview of fiscal year 2023 – executive summary

    | Period | ResMed's annualized total stockholder return (NYSE) | S&P 500 annualized total stockholder return | US peer group median annualized total stockholder return | | One year ended June 30, 2023 | 5% | 18% | 10% | | Three years ended June 30, 2023 | 5% | 13% | 11% | | Five years ended June 30, 2023 | 17% | 10% | 11% |

  25. Overview of fiscal year 2023 – executive summary

    Because our primary listing is on the NYSE, the TSR performance of our CHESS Units of Foreign Securities trading on the ASX is impacted by currency fluctuations between the US and Australian dollars. Nevertheless, on an annualized basis, our one- and three-year TSR on the ASX was comparable to the performance of the ASX 100 and our ASX peer group, while our five-year TSR out-performed the ASX 100 and our ASX peer group.

  26. Overview of fiscal year 2023 – executive summary

    | Period | ResMed's annualized total stockholder return (ASX) | ASX 100 annualized total stockholder return | ASX peer group median annualized total stockholder return | | One year ended June 30, 2023 | 10% | 10% | 12% | | Three years ended June 30, 2023 | 7% | 7% | 7% | | Five years ended June 30, 2023 | 20% | 4% | 7% |

  27. Overview of fiscal year 2023 – executive summary

    Strong capital management and return to our stockholders. During fiscal year 2023, we maintained the quarterly dividend of $0.44 per share paid to our stockholders, paying approximately $258 million to our stockholders in dividends, representing a dividend payout ratio of 29% of net income, or 27% of adjusted (non-GAAP) net income. In August 2023, we increased our quarterly dividend by 9%, to $0.48 per share for fiscal year 2024. During fiscal year 2023, we did not repurchase any stock. We suspended our stock repurchase program in fiscal year 2019, due to acquisitions, and have not resumed it. We may resume the program during fiscal year 2024, depending on cash flow and other conditions. Compensation at risk and tied to our performance. During fiscal year 2023, approximately 91% of our chief executive officer's target total direct compensation and 76%-85% of our other named executive officers’ target total direct compensation were at risk in the form of annual cash incentives and equity awards, which are paid or earned based on our financial and stock price performance. The compensation decisions for fiscal year 2023 generally maintained the at-risk weighting for our named executive officers compared to fiscal year 2022, and reflect our pay for performance philosophy. •Annual cash incentive awards were earned in a range from approximately 97% to 112% of target opportunity, based on performance in our key financial measures. During fiscal year 2023, the primary performance measures for our chief executive officer, our president and chief operating officer, and our chief financial officer were two measures, weighted equally: adjusted net sales, which was achieved at 103.51% of target; and adjusted operating profit, which was achieved at 98.28% of target. Based on these two metrics, these three corporate executives earned 102.97% of their target short-term cash incentive opportunity for fiscal 2023. These same two components, weighted equally, comprised 40% of the incentive opportunity for the presidents of our sleep and respiratory care business and for our SaaS business. The remaining 60% of the opportunity for these two executives was based on the same specific performance measures at the business unit level weighted equally (30% each). We believe these measures reflect operating activities that are within the officers’ purview and most important to long-term stockholder value creation, as they focus on top line and bottom line performance. These two executives earned approximately 111.5% and 97.25%, respectively, of target short-term cash opportunity. For each short-term incentive measure, achievement at less than 85% of target results in no payout, achievement at 85% of target results in 50% earned, achievement at target results in 100% earned, achievement of 115% of target results in 150% earned and achievement at 130% or greater of target results in the maximum earned of 200%. We achieved between 98.28% to 103.51% of targeted performance for our 2023 corporate, sleep and respiratory unit, and SaaS unit level goals, resulting in total earn-outs per measure ranging from 89.18% to 122.97% of target cash incentive opportunity for the individual metrics (before weighting), and total payouts after weighting were 102.97% of target incentive opportunity for our CEO, COO, and CFO, and was 97.25% and 111.53%, respectively, of target cash incentive opportunity for our president of SaaS and president of sleep and respiratory care, as illustrated in the tables below.

  28. Overview of fiscal year 2023 – executive summary

    | Goal | Target performance | Actual performance | % of goal achieved | % of payout earned (before weighting) | | Corporate adjusted net sales | $4,022,195 | $4,163,222 | 103.51% | 111.69% | | Corporate adjusted operating profit | $1,299,939 | $1,277,536 | 98.28% | 94.26% | | Total Corporate after 50% weighting -102.97% | | | | | | Sleep & respiratory care adjusted net sales | $2,830,842 | $3,025,929 | 106.89% | 122.97% | | Sleep & respiratory care adjusted net operating profit | $1,150,517 | $1,190,249 | 103.45% | 111.51% | | Total Sleep & respiratory after 30% weighting - 70.34% | | | | | | SaaS adjusted net sales | $436,471 | $433,443 | 99.31% | 97.69% | | SaaS adjusted operating profit | $100,882 | $97,607 | 96.75% | 89.18% | | Total SaaS weighted after 30% weighting - 56.06% | | | | |

  29. Overview of fiscal year 2023 – executive summary

    | Executive(1) | Farrell | Blaise | Douglas | Ghoshal | Sandercock | | Corporate adjusted net sales | 50% weight/ 55.84% payout | 20% weight/ 22.34% payout | 50% weight/ 55.84% payout | 20% weight/ 22.34% payout | 50% weight/ 55.84% payout | | Adjusted net operating profit | 50% weight/ 47.13% payout | 20% weight/ 18.85% payout | 50% weight/ 47.13% payout | 20% weight/ 18.85% payout | 50% weight/ 47.13% payout | | Sleep & respiratory care adjusted net sales | | 30% weight/ 36.89% payout | | | | | Sleep & respiratory care adjusted net operating profit | | 30% weight/ 33.45% payout | | | | | SaaS adjusted net sales | | | | 30% weight/ 29.31% payout | | | SaaS adjusted net operating profit | | | | 30% weight/ 26.75% payout | | | Total payout as % of target opportunity | 102.97% | 111.53% | 102.97% | 97.25% | 102.97% |

  30. Overview of fiscal year 2023 – executive summary

    •We set challenging goals for our executives for fiscal year 2023. All fiscal year 2023 cash incentive plan target goals were substantially higher than fiscal year 2022 actual performance and fiscal year 2022 target goals, despite the challenging operating environment including supply chain constraints and the increase in manufacturing, warehouse and component costs associated with meeting the demand generated by our competitor's recall. As in past years, our short-term incentive goals are aligned with our internal budget, as adjusted per plan parameters. Our fiscal year 2023 adjusted net sales target required 11.2% growth over fiscal year 2022. Our actual fiscal year adjusted net sales growth under the short-term incentive cash plan (adjusted per committee-approved plan calculations) was 15.1%, from $3.616 billion in fiscal year 2022 to $4.163 billion in fiscal year 2023, resulting in approximately 111.7% of target opportunity earned for this metric before weighting. Our fiscal year 2023 target for adjusted operating profit was particularly influenced by the supply chain constraints and additional costs, and set at a level that required us to grow our fiscal year 2022 adjusted operating profit by 12.4%. Our actual adjusted operating profit under the short-term incentive cash plan (adjusted per committee-approved plan calculations) increased by 10.5%, from $1.156 billion in fiscal year 2022, to $1.278 billion in fiscal year 2023, resulting in approximately 94.3% of target opportunity earned for this metric before weighting. Our operating profit growth goals and performance were impacted by increased manufacturing, warehouse and component costs, geographic and product mix compared to the prior year, and increased employee and travel costs as pandemic restrictions eased and remote teams met to pursue their goals. Our equity program is tied to stock price performance and provides a direct link with the long-term interests of our stockholders. •Our equity program design is balanced, with 50% of grant value in long-term performance units, providing a direct link with the long-term interests of our stockholders. Fifty percent of our named executives’ annual equity award values are in the form of performance-based stock units (PSUs) that are earned over a four-year performance period beginning on our annual meeting date, with the number of shares to be earned depending on our NYSE TSR, over the applicable performance period. The performance period is accelerated to three years if specified accelerated goals are met. For each of the PSU three-year cycles completed since the adoption of our PSU structure in November 2015, the PSU performance period has been accelerated to three years. The PSUs granted in November 2020 are not currently expected to pay out after a three-year accelerated performance period, though 25% of these PSUs have been earned and banked based on interim stock price performance. In addition to the PSUs, the other 50% of the grant date value of our annual equity awards are granted in the form of either stock options or performance-based RSUs. Before the grant date, the officer can choose to receive the remaining 50% of grant value as 100% options, 100% performance-based RSUs, or 50% of each. The committee believes offering choice allows flexibility to match incentives with individual circumstances, thus creating stronger retention. Moreover, the board has included stock options and time-based equity compensation as incentive compensation that is subject to recovery, or that may be used as a means of satisfying recovery obligations, under our recently updated compensation recovery policy. Both the options and RSU awards time vest subject to continued service over a three-year period, but the RSU awards are also subject to the performance condition that in the fiscal year in which the grant is made, we achieve 50% of our budgeted quarterly adjusted operating profit in our third and fourth quarters, either each individually or combined for the two quarters. We exceeded the minimum targeted adjusted profit for the second half of fiscal year 2023, and thus, all RSUs that were granted during the fiscal year were earned, although the grants continue to be subject to a ratable three-year service-based vesting requirement from the grant date. We consider our RSU awards and stock option awards to be performance-based, because the ultimate value an executive will derive depends mostly on our stock performance, which in turn is driven by our financial performance. Our fiscal year 2023 equity program is illustrated below: •PSUs earned based on absolute TSR, with meaningful TSR targets. In fiscal year 2023, the committee continued the PSU design begun in fiscal 2016: PSUs are earned for absolute TSR on the NYSE with a target earnout set at 10% compounded annual returns, which equates to approximately 46% cumulative returns over four years, and approximately 33% cumulative returns over three years. The performance period is measured from the date of grant, which is the date of our annual stockholder meeting during that year. Our long-term PSUs are based on cumulative absolute TSR performance over a four-year performance period, with threshold, target, and maximum performance based on achieving four-year cumulative TSR of approximately 22%, 46%, and 75%, respectively (based on annualized returns of 5% at threshold, 10% at target and 15% at maximum). No shares are earned for below-threshold performance. Payouts for outstanding grants made in fiscal years 2021 and 2022 may range from 50% to 225% of target shares granted. Commencing with the grant of PSUs made in fiscal year 2023, the compensation committee reduced the maximum payout from 225% of target to 200% of target to align with prevailing market practices among our peers. In addition, our PSUs provide for an earlier payout opportunity, to recognize that a multi-year TSR incentive is effectively subject to point-to-point comparison, and to encourage and recognize goal achievement on an accelerated basis. If we achieve cumulative three-year absolute TSR performance of 16% (representing threshold performance for the three-year period based on threshold 5% annual returns) or greater at the end of the third year of the performance period, payout of the award accelerates to the end of the three-year period. The earnout formula at the end of three-year performance period employs the same annualized TSR requirements of 5%, 10%, and 15% for threshold, target, and maximum performance as required under the four-year performance period, equating to approximately 16%, 33%, and 52% cumulative returns, respectively, over the three-year period, as shown in the table below. If there is an award earned for three-year TSR performance, the performance period terminates and there is no opportunity to earn additional awards for four-year TSR performance.

  31. Overview of fiscal year 2023 – executive summary

    | TSR requirements | Annual base TSR | Cumulative 4-year TSR | Accelerated cumulative 3-year TSR | Payout percentage of target shares granted | | Below threshold | Below 5% | Less than 21.6% | Less than 15.8% | 0 | | Threshold | 5% | 21.6% | 15.8% | 50% | | Target | 10% | 46.4% | 33.1% | 100% | | Maximum(1) | 15% | 74.9% | 52.1% | 200% |

  32. Overview of fiscal year 2023 – executive summary

    (1) Maximum earnout is 225% for outstanding PSU grants made in fiscal years 2021 and 2022. Commencing with annual awards for fiscal 2023 made in November 2022, maximum earnout is capped at 200% of PSUs granted to align with the interests of our shareholders. Our PSU program design encourages accelerated achievement of targeted growth by including an additional feature whereby 25% of the target PSUs may be earned and banked if, during the first three years, at the end of any fiscal quarter, cumulative TSR since grant is equal to or greater than 33%, which is the required minimum performance for payout at target after three full years. Banked awards are paid at the end of three years, count against actual awards earned based on performance at the end of the three- or four-year performance period, as applicable, and once the banking condition is met, no additional banking may occur. The committee believes this PSU design closely aligns with actual stockholder experience, mitigates for point-to-point stock price volatility, provides a strong retention mechanism, and rewards long-term value creation for our stockholders. •Our strong TSR over the three-year period ending November 2022 resulted in performance share earnouts at the maximum. Annual PSU grants that vested in fiscal year 2023 were made in November 2019, and were earned based on an accelerated three-year performance period ending November 20, 2022. Over this performance period, we delivered cumulative absolute TSR of 53.24%, which was above the maximum three-year goal of 52%, and represented compound annual returns of 15.32%. This return triggered shares to be delivered at the maximum ceiling of 225% of the target number, resulting in a pay-for-performance outcome, while appropriately limited by the plan’s design of a maximum ceiling. •Current outstanding PSUs tracking at below threshold performance. Our interim TSR results for the PSUs granted in fiscal years 2021, 2022, and 2023, however, would result in partial or no payout on our outstanding PSUs if the performance period for these PSUs ended June 30, 2023 when our stock price was $218.50. The PSUs granted in November 2020 (fiscal year 2021) are not currently expected to payout after the three-year accelerated performance period ending November 2023, except that 25% of the fiscal year 2021 target PSUs have been earned and banked based on interim stock performance, and will thus be paid at the end of the three-year performance period for banking. These results further illustrate the focus on tying at-risk pay to performance and alignment with stockholder interests and our stock price performance. •New relative TSR performance measure over three-year performance period adopted for fiscal year 2024 PSU Program. In August 2023, after consideration of input from our independent compensation consultant and market best practices, the compensation committee determined to revise our PSU program effective with the fiscal 2024 grants, to be made in November 2023, to include a relative TSR performance measurement for 50% of the PSUs to be granted as compared to the TSR performance of the S&P 500 Index over a three-year performance period. Payout would range from 0% to 200% of target PSUs granted, with target relative TSR performance at 60th percentile resulting in 100% payout, and relative performance at the 95th percentile or better resulting in a 200% payout; provided, however, that if our absolute TSR is negative, then payout for our relative TSR performance cannot exceed 100% regardless of our relative percentile performance. As a result of this change, half of our PSU award (or 25% of the overall long term incentive award) will be based on absolute TSR, and half of our PSU award (or 25% of the overall long term incentive award) will be based on relative TSR. Our fiscal year 2024 equity program is illustrated below: Market-competitive compensation and balancing US and Australian pay practices. Our objective is to provide a target total compensation program that is competitive with similarly-sized US-based public companies in the medical device and medical technology industries with which we compete for executive talent. One of the continued foundations of our ResMed 2025 strategy is to attract and retain high-performing, diverse, and entrepreneurial people, which we believe requires providing total direct compensation for executives that is at least near the median. The committee reviews benchmark data, but does not target a specific benchmark level. Our US-based pay philosophy results in executive compensation that is different than the Australian model, with lower base salary, higher short-term cash incentives, and higher target equity value in alignment with US best practices. US norms also have a lower percentage of equity value subject to performance conditions than exhibited by Australian companies. We balance these competing philosophies by adhering to US best practices and grant 50% of equity in performance stock units. According to FW Cook’s August 2022 report, which the committee reviewed before the fiscal year 2023 compensation decisions were made, our US peers, as a group, granted, on average, 41% of their long-term incentive value in the form of performance-vested awards, compared to Australian peers which granted, as a group, approximately 77% of their long-term incentive value in the form of performance-vested awards, FW Cook’s report showed that fiscal year 2022 target total direct compensation (measured by base salary, short-term incentive at target payout, and long-term equity incentive at grant date value) for our chief executive officer was positioned at the 49th percentile for US peers and higher than any of the Australian peers. Most of our executive officers reside and work in the US, our primary listing is on the NYSE, and many of our competitors are US-based, so we consider this design a balanced approach, appropriate for our labor and investor markets. History of positive say-on-pay vote. At our annual meeting held in November 2022, our stockholders voted to approve, on an advisory basis, the compensation paid to our executive officers disclosed in last year’s proxy statement; approximately 90% of the shares voted on this proposal voted in favor of our executive compensation. The 90% support was a slight increase above, but largely consistent with, the 89% approval in November 2021. The compensation committee believes this vote continues to signal support for our programs, which are set based on a US compensation philosophy. We believe that our dual US and Australia stockholder base affects our say-on-pay support in a manner that does not apply to many of our US competitors, as there is an expectation by some Australian stockholders that the US-based executive team should have compensation that reflects the local Australian labor market, rather than the US market where most of the executives are domiciled and where ResMed is headquartered and competes for talent. We believe our compensation arrangements are in the best long-term interests of our stockholders, because most of our executive officers are in the US, and we compete for talent mostly with companies that pay using US compensation structures. We also believe that our financial and operational successes in a challenging environment and five-year TSR strength support the view that the current compensation structure is incentivizing the right behavior, aligns pay with performance, and results in long-term value creation for our stockholders.

  33. Philosophy and objectives of our executive compensation program

    Philosophy and objectives of our executive compensation program We want to attract, motivate, and retain high-quality employees who reflect our values and will enable us to achieve our short- and long-term strategic goals. We operate in a high-growth environment where substantial competition exists for skilled employees. Our ability to attract, motivate, and retain high-caliber individuals depends in large part on the compensation packages we offer. We believe that our executive compensation programs should reflect our financial and operating performance. In addition, individual contribution to our success should be supported and rewarded. In designing and implementing our executive compensation program, the committee is guided by the following principles: Pay-for-performance aligned with stockholder interests and largely at-risk compensation are the cornerstones of our compensation program. A significant portion of our executives’ compensation is at-risk and tied to the achievement of pre-established short-term corporate financial objectives through our annual cash incentive programs that our corporate officers earn based on achieving our corporate goals for adjusted net sales and adjusted operating profit, weighted equally. These two measures represent fundamental financial metrics: top-line sales, and bottom-line profit. Our executives in charge of a business unit have 60% of their incentive opportunity tied to achieving set goals for the same metrics at the business unit level and the remaining 40% tied to the corporate goals. All payouts are determined in accordance with these objective performance metrics. For fiscal year 2023, named executive officer payouts ranged from 97.25% to 111.53% of target cash incentive opportunity, with no discretion applied to the amount paid, reflecting our strong performance. Equity is a key component of our at-risk compensation. We believe our equity-based incentive award program enhances long-term stockholder value creation and encourages long-term performance, because equity-based incentive awards align our executives’ financial rewards with those of our stockholders through appreciation of our stock price. We grant 50% of the value of our executive officers’ equity grants in the form of TSR-contingent PSUs, with the number of shares earned determined after a four-year performance period, with the ability to accelerate after three years, based on our absolute TSR (also, up to 25% of target PSUs may be earned during the first three years under certain conditions that require excellent TSR performance). We grant the other 50% of the value of our executive officers’ equity grants in the form of performance-based RSUs and/or stock options, which may be chosen individually by executives. Commencing with fiscal 2024 grants to be made in November 2023, 50% of the PSUs granted will be earned based on our TSR performance relative to the TSR of the S&P 500 Index over a three-year performance period, and the remaining 50% of PSUs will continue to be earned based on our absolute TSR performance. The vesting of RSUs to our executive officers is subject to a specific performance condition related to our adjusted operating profit, in addition to our three-year ratable vesting requirement. This condition was intended for units to qualify as performance-based compensation under Section 162(m) of the US Internal Revenue Code and preserve the deductibility of the compensation paid, while providing a tie to our measurable performance. In December 2017, however, US federal tax laws eliminated the US tax advantage of this performance-based condition. While the potential tax advantage remained available under California law for a period after effectiveness of the federal tax law, California conformed to the federal tax law for taxable years beginning on or after January 1, 2019, subject to certain grandfathered arrangements. However, this performance condition also provides a tie to our operating performance and has been maintained as an element of our program, despite the change in tax treatment. We believe that stock options are inherently performance-based, because they only deliver value if our stock price increases above the closing price on the date the option is granted. In addition, the value our executive officers ultimately receive from either stock options or RSUs depends on our stock performance over the three-year vesting periods of the grants. The vesting periods and the long-term performance periods under our PSUs also encourage retention of top executive talent. For fiscal year 2023, our CEO’s target direct compensation was based 90% on incentive compensation that was at risk, with only 8% in guaranteed salary (as shown in the Summary Compensation Table below), while the other named executive officers have an average of 82% of their target direct compensation in the form of incentive compensation that is at risk and 15% as salary. We maintain this at-risk philosophy, which is common in the US, despite market data showing that base salary is more emphasized in Asia, Australia and Europe, where some of our executives reside. Provide market-competitive cash compensation. Our objective is to provide a target total compensation program that is competitive with similarly-sized US-based public companies in the medical device and medical technology industries with which we compete for executive talent. The committee reviews benchmark data for the individual and for the group as a whole, but does not target a specific benchmark level. See "Market-competitive compensation and balancing US and Australian pay practices" above. Make informed decisions. The committee annually retains an independent compensation consultant to advise the committee on executive compensation matters for executive officers and to perform a comprehensive market analysis of our executive compensation program, pay levels, and relative operating performance. See the section titled “Peer group comparisons” below.

  34. Fiscal year 2023 compensation process and peer group companies

    Fiscal year 2023 compensation process and peer group companies Compensation committee role. The compensation committee establishes our general compensation policies, and reviews and approves salaries, short-term incentives, equity-based compensation, and all other elements of the compensation offered to our executive officers (including our named executive officers), and all other executives that report to the office of the chief executive officer. The board has determined that all members of the compensation committee are independent directors under NYSE standards. On an annual basis, the committee considers each of the three primary elements of compensation (salary, cash incentives and equity) based on market analysis, individual performance, the value of the individual to ResMed, and other factors it deems relevant. The committee also considers regional variation. The committee attempts to balance the goal of paying consistently with the local market, with the goal of maintaining internal consistency using a US pay philosophy for executives in different regions, which creates alignment throughout the executive team. The committee also reviews our peer group, our executive benefits and perquisites, our equity pay practices, our director compensation, and the risks related to our compensation programs, on an annual basis. The committee regularly considers supplemental compensation policies and practices such as change of control, severance, and retirement. Timing of decisions. Historically, and for fiscal year 2023, the committee reviewed and set our executive officers’ cash compensation in August. Any changes to cash compensation are generally made effective on December 1, to align with our annual equity grant, which generally occurs on the date of our stockholder meeting in November. This timing is consistent with our practice for all employees. This timing allows us to consider the previous year’s performance, and the new fiscal year’s performance goals, in compensation decisions. The committee generally makes decisions on the principal components of executive officer compensation – base salary, short-term incentive potential, equity awards, and perquisites – during the first quarter of the fiscal year. The design of the short-term incentive program, and specific short-term incentive performance targets for executive officers are generally aligned with our internal budget process, as adjusted by the committee under the plan parameters, and determined before or during the first quarter of the fiscal year. Short-term incentive goal setting for fiscal year 2023 was determined at the first board meeting after the beginning of the fiscal year. Determining actual performance versus targets and calculating short-term incentive payouts generally occur after the end of our fiscal year. Short-term incentive payments to our executive officers are made after the fiscal year-end audit is complete. The impact on compensation of a change of role is generally decided contemporaneous with the role change. Independent compensation consultants. In making its decisions, the committee reviews data obtained from peer group companies and considers the recommendations of management and the analysis and advice of its independent compensation consultants regarding each element of compensation. The committee has independent authority to retain advisors. The committee has retained FW Cook, Inc., an independent compensation consultant, to advise the committee with respect to compensation matters for executive officers. FW Cook performs no work for us other than its work providing executive compensation consulting services to the committee. During fiscal year 2023, the committee reviewed market practices and benchmark data from FW Cook, ResMed’s and our executives’ relative performance, and the recommendations of its consultants. FW Cook also advised the committee regarding the Australian company benchmarks for the positions of our chief executive officer, as well as executives who reside there. FW Cook further advised the committee regarding long-term incentive design practices and alternatives as well as peer group equity practices. In addition to FW Cook, management retained Infinite Equity, Inc. to advise on valuing performance results of our PSUs and to assist with new SEC disclosure requirements. The committee also considered the experience and knowledge of committee members regarding compensation practices for comparable positions at other companies. Although the committee considers various sources of information and recommendations, ultimately, of course, the committee relies on its own independent judgment. Management’s role. Our management team, particularly our chief people officer and her team, provide input and recommendations to the committee regarding executive compensation. Management provides historical and prospective financial analysis of compensation components and financial performance data. Management also makes recommendations for the committee’s review and decision. While management members typically attend committee meetings, the committee chair excuses individual management members as appropriate for independent review and decision-making. Peer group comparisons. In making its decisions on executive compensation, the committee generally uses industry compensation surveys prepared by FW Cook, which review each position against comparable positions within a peer group. The US peer companies are generally within one-quarter and four times the size of our revenue and market capitalization, with ResMed approximately in the middle to avoid bias from too many large or small peer companies. We select peer companies that are medical device or medical technology companies with a market capitalization, profitability, revenue, and employee population roughly comparable to ours. The committee periodically reviews the composition of the peer group and the criteria and data used in compiling the list and considers modifications to the group. In February 2022, before making fiscal year 2023 compensation decisions, the committee reviewed the US peer group used for fiscal year 2022 and removed one company, Varian Medical Systems, due to its acquisition; and added two companies: Boston Scientific, for its medical device focus, and Abiomed, for its technology focus. As a result, the following 20 companies comprised the US peer group that informed our fiscal 2023 compensation decisions:

  35. Fiscal year 2023 compensation process and peer group companies

    | US Peer Group | | | Abiomed, Inc. | Edwards Lifesciences Corp. | | Agilent Technologies, Inc. | Hologic Inc. | | Align Technology, Inc. | IDEXX Laboratories, Inc. | | Baxter International, Inc. | Illumina, Inc. | | Bio-Rad Laboratories, Inc. | Intuitive Surgical, Inc. | | Boston Scientific | Mettler-Toledo International Inc. | | Charles River Laboratories International, Inc. | Revvity, Inc. (formerly PerkinElmer) | | The Cooper Companies Inc. | STERIS plc | | Dentsply Sirona Inc. | Teleflex Incorporated | | Dexcom, Inc. | Waters Corporation |

  36. Fiscal year 2023 compensation process and peer group companies

    As of February 2022, compared to our US peer group, ResMed was above the median in market capitalization size and operating income, and was near the 40th percentile for four-quarters trailing revenue. The committee believes that this peer group reflected a reasonable cross-section of our labor market for talent and included companies that our investors might consider in determining the reasonableness of our pay and alignment of our pay with our performance. The committee also considers compensation survey data analyzed by FW Cook regarding similarly-sized ASX-traded publicly listed companies for our Australia-based chief financial officer, and for other executives based in Australia, as well as for our chief executive officer. Our chief executive officer is based in the US, so the Australian data is viewed as supplemental and secondary to the US data, and reviewed to understand the differences between the potential expectations of our NYSE and ASX stockholders. The committee generally gives less weight to the Australian peer group, because the ASX peer group is less comparable to ResMed, and because ResMed compensates senior executives and directors on a US-style pay model, which is structurally and quantitatively different from the typical practices of companies in the ASX peer group. In February 2022, the committee reviewed the existing Australian peer group, considered other Australian companies for inclusion, and decided to add Xero, for its SaaS focus, and Telstra, for its digital health software focus. The resulting 16 Australian peer group companies reviewed for fiscal 2023 compensation decisions were:

  37. Fiscal year 2023 compensation process and peer group companies

    | Australian Peer Group | | | Amcor | REA Group | | Aristrocrat Leisure | Reece Limited | | Brambles | Sonic Healthcare | | Cochlear Limited | Seek Limited | | CSL Limited | Sydney Airport | | Fisher & Paykel Healthcare Limited | Telstra | | James Hardie Industries PLC | Transurban | | Ramsay Healthcare | Xero |

  38. Fiscal year 2023 compensation process and peer group companies

    As of the February 2022 committee meeting, ResMed was above the 75th percentile in market capitalization compared to our Australian peer group, and approximately at the median in trailing twelve-months’ revenue. The committee maintains a reference group of SaaS companies to be used as a secondary source of information. The seven SaaS companies are not a formal peer group, but are reviewed to recognize the increasing relevance of our SaaS business, and to understand how our compensation decisions are competitive for our evolving SaaS business. No changes were made in the composition of this group. The seven SaaS reference group companies reviewed for fiscal 2023 compensation decisions were:

  39. Fiscal year 2023 compensation process and peer group companies

    | SaaS Reference Group | | | Akami Technologies, Inc. | NetApp, Inc. | | Arista Networks | ServiceNow, Inc. | | Atlassian Corporation Plc | Veeva Systems, Inc. | | DocuSign, Inc. | |

  40. Elements of compensation

    Elements of compensation Base salary. Base salaries provide our executives with a degree of financial certainty and stability. To attract and retain highly qualified executives, we pay within salary ranges that are generally based on similar positions in companies of comparable size and complexity in the US. Using the peer group data, the committee assesses market base salaries at the median, 60th and 75th percentiles. Our executive compensation philosophy is to be guided by salaries for high performing and experienced officers among our US peer group. Adjustments are made based on the committee’s assessment of position, performance, experience, location, and role. We typically review annual salary adjustments for our named executive officers each August with an effective adjustment date in December of each year. For fiscal 2023, after consideration of market data, the committee determined to increase base salaries in the range of approximately 2% - 4%. The table below shows the base salaries for our named executive officers. For Mr. Sandercock, who is based in Australia, the amounts shown in the table below represent the US dollar equivalent of his non-US dollar-denominated salaries, which is impacted by currency fluctuations. We believe that year-to-year currency fluctuations make the constant currency increases most meaningful for officers residing outside the US.

  41. Elements of compensation

    Annual performance-based short-term cash incentives. The purpose of our annual short-term cash incentive program is to motivate our executives to meet or exceed our company-wide and business unit short-term operating performance objectives. The program is intended to motivate our management team to execute on our business goals, to realize our budgeted performance, to share our success with eligible executives to the extent warranted by our performance, and to provide competitive compensation. Amounts earned are based on a targeted percentage of actual salary paid for the year, rather than the base salary in effect at the end of the year. In setting short-term incentive target opportunities for fiscal year 2023, the committee reviewed data for the 50th, 60th, and 75th percentiles of the peer group. For fiscal year 2023, the committee made no change to the target short-term incentive opportunity for our named executive officers, which range from 80% to 130%. The committee believes it best to tie each executive’s incentive pay to the areas over which the executive can assert the most influence and to vary the weighting to reflect the relative focus desired by the executive for each metric. For fiscal year 2023, the key features of the short-term incentive program continued from fiscal year 2022. As a result of these decisions, the committee approved a short-term incentive program for fiscal year 2023 shown in the tables below.

  42. Elements of compensation

    The payout structure for our short-term cash incentive program has remained the same for several years although the goals are updated each year to align with the annual business plan. Amounts earned are based on achieving pre-established goals for each performance metric, applied to each metric individually, as described in the following table. Payouts are expressed as a percentage of short-term incentive opportunity for that performance metric. Performance between the achievement levels is paid based on linear interpolation. The committee has established a cap on the maximum short-term incentive total payout at 200% of each officer’s target short-term incentive opportunity, with no payout on a performance measure if performance is less than 85% of target goal for that measure.

  43. Elements of compensation

    | No payout | 50% payout | 100% payout | 150% payout | 200% payout | | <85% of goal | 85% of goal | 100% of goal | 115% of goal | ≥130% of goal |

  44. Elements of compensation

    | Short-term incentive component | Threshold performance- 50% payout ($ in thousands) | Targeted performance- 100% payout ($ in thousands) | Maximum performance- 200% payout ($ in thousands) | Actual performance ($ in thousands) | Percentage of targeted performance achieved | Short-term incentive percentage earned based on percentage achieved | | Adjusted net sales | $3,418,866 | $4,022,195 | $5,228,853 | $4,163,222 | 103.51% | 111.69% | | Adjusted operating profit | $1,104,948 | $1,299,939 | $1,689,921 | $1,277,536 | 98.28% | 94.26% | | Total achieved after weighting | | | | | | 102.97% | | (50% each) | | | | Farrell, Douglas and Sandercock | | | | Sleep & respiratory care business net sales | $2,406,215 | $2,830,842 | $3,680,094 | $3,025,929 | 106.89% | 122.97% | | Sleep & respiratory care business operating profit | $977,939 | $1,150,517 | $1,495,671 | $1,190,249 | 103.45% | 111.51% | | Total achieved after weighting | | | | | | 111.53% | | (20%-20%-30-30%) | | | | | Blaise | | | SaaS business adjusted net sales | $371,000 | $436,471 | $567,412 | $433,443 | 99.31% | 97.69% | | SaaS business adjusted operating profit | $85,749 | $100,882 | $131,146 | $97,607 | 96.75% | 89.18% | | Total achieved after weighting | | | | | | 97.25% | | (20%-20%-30-30%) | | | | | Ghoshal | |

  45. Elements of compensation

    We set challenging goals for fiscal year 2023. Each of our goals for 2023 required growth over the prior year performance, but also reflected expectations for continuing supply chain constraints and related cost increases. The headwinds to our sleep business from reduced sleep patient diagnosis were expected to continue in fiscal year 2023, while the tailwinds that were present in fiscal year 2022 from COVID-19-related ventilator sales did not continue materially into fiscal year 2023. The increase in demand caused by our competitor's recall drove more sales of flow generators, but at a lower operating profit based on geographic and product mix. Nonetheless, the targeted goals established for fiscal 2023 were greater than the prior year’s targeted goals and were greater than fiscal 2022 actual performance. And, despite the cost increases and product mix, the growth percentage required under the net operating profit goal at target performance under the fiscal 2023 cash incentive plan was greater than was required under our fiscal 2022 plan. Our fiscal year 2023 adjusted net sales target required 11.2% growth over fiscal year 2022. Our actual fiscal year 2023 net sales growth (adjusted for committee-approved plan calculations) was 15.1%, from $3.616 billion in fiscal year 2022 to $4.163 billion in fiscal year 2023, resulting in 111.7% of target opportunity earned for this metric before weighting. Our fiscal year 2023 target for adjusted operating profit was set at a level that required us to increase our fiscal year 2023 adjusted operating profit by 12.4%. Our actual adjusted operating profit (adjusted for committee-approved plan calculations) increased by 10.5%, from $1.156 billion in fiscal year 2022 to $1.278 billion in fiscal year 2023, resulting in 94.3% of target opportunity earned for this metric before weighting. Incentive Plan Adjustments. The short-term incentive targets are set when our internal forecasts and budget for the full fiscal year are finalized, which for fiscal year 2023 occurred in August 2022. Our internal forecasts for the GAAP measures of net sales and operating profit set the basis for our short-term incentive targets. In calculating short-term incentive metrics achievement, the committee made adjustments, consistent with plan parameters, as shown in the table below, from our GAAP financial statement revenue and operating profit calculations and from our internal reporting, to eliminate the impact of certain non-operating revenue and expenses as set forth in the table below. There were no adjustments to net sales and operating profit for the sleep and respiratory care business under the short term incentive program.

  46. Elements of compensation

    | STI metric and adjustment(s) | Amount (000's) | | Net sales (GAAP) | $4,222,993 | | use budgeted exchange rates | $7,438 | | exclude sales from unbudgeted acquisitions | -$67,210 | | Adjusted net sales | $4,163,222 | | Operating profit (GAAP) | $1,131,871 | | exclude stock-based compensation | $71,137 | | exclude amortization of acquired intangibles | $72,416 | | exclude profits and losses from unbudgeted acquisitions | -$13,572 | | exclude acquisition-related costs | $10,949 | | exclude restructuring expenses | $9,177 | | use budgeted exchange rates | -$4,443 | | Adjusted operating profit | $1,277,535 | | Net sales - SaaS business (non-GAAP from internal reporting) | $497,974 | | exclude sales from unbudgeted acquisitions | -$64,531 | | Adjusted net sales - SaaS business | $433,443 | | Operating profit - SaaS business (non-GAAP from internal reporting) | $115,529 | | exclude profits and losses from unbudgeted acquisitions | -$17,518 | | exclude acquisition-related costs | -$191 | | use budgeted exchange rates | -$213 | | Adjusted operating profit - SaaS business | $97,607 |

  47. Elements of compensation

    | Named executive officer | Annual short-term incentive target percentage | Annual short-term incentive target | Annual short-term incentive earned | Actual short-term incentive as a percentage of target | | Michael Farrell | 130% | $1,466,674 | $1,510,264 | 102.97% | | Lucile Blaise | 80% | $382,996 | $427,155 | 111.53% | | Rob Douglas | 100% | $909,124 | $936,144 | 102.97% | | Bobby Ghoshal | 80% | $489,234 | $475,780 | 97.25% | | Brett Sandercock | 80% | $373,618(a) | $384,705(a) | 102.97% |

  48. Elements of compensation

    (a)These amounts are in USD and are converted from the amounts that were approved in local currency by the committee. The foreign currency is converted to USD based on the fiscal year 2023 average annual exchange rate of approximately AUD:USD 1 to .6733. The committee has approved a short-term incentive program for the named executive officers for fiscal year 2024 that continues the 2023 program design with no structural changes. Long-term incentive equity award program. The largest component of our named executive officers’ direct compensation provides a long-term incentive and alignment with stockholders through equity participation. The primary purpose of granting equity awards is to link our officers’ financial success to that of our stockholders, with the value of the equity awards increasing only as our stock price increases, and to promote long-term value creation. Our equity mix is 50% in long-term performance-based PSUs, and the remaining 50% in performance-based RSUs and/or stock options. This mix increases the capability of the committee to effectively manage our use of shares under our stock plan, balances the performance leverage and performance risk provided by various equity vehicles, more closely conforms with practices at our peer companies, and promotes long-term stock appreciation and value creation. During fiscal year 2023, we continued to grant PSUs for 50% of the annual equity value for executive officers, and to provide named executive officers the choice to select whether the balance of their equity awards would be entirely in the form of stock options, entirely in RSUs or evenly split (in value) between the two. The combined availability of options and RSUs gives our executives the opportunity to balance the incentive award in a manner that suits their particular risk profile and their own preferences in financial or tax planning in US and non-US jurisdictions. We do not pay dividends or dividend equivalents on any of our unvested or unearned equity awards. Fiscal year 2023 equity grant values. Each year, the committee establishes grant values, but the relative ratios of PSUs, RSUs, or stock options are determined by the relative values computed under Financial Accounting Standards Board Accounting Standards Codification Topic 718. In determining the value of awards granted to specific named executive officers, the committee reviewed our performance, the number of outstanding awards available, the present value of the proposed grant, existing unvested equity ownership, the awards granted in prior years, and the grant practices of our peer group companies. For fiscal year 2023, the committee reviewed peer company data to determine competitive equity award values, at the median, 60th, and 75th percentiles, for each officers’ position. The committee also considered internal equity relationships, to promote a team-based approach for our senior management team. In arriving at the specific grant size, the committee considered the peer group benchmarks at an individual level, as well as aggregate equity compensation for similar groups at our peers. The committee also considered our officers' individual performance during the prior fiscal year (i.e., 2022), as well as their experience in their role, and expected future contributions. Taking all those factors into account, the committee approved increased 2023 equity grant values as follows: (i) our chief executive officer received a 22.2% increase, which was informed by his strong performance, values and company performance in 2022, and to improve the market competitiveness of his equity compensation given that it was at the 47th percentile of the US peer group; (ii) our president and chief operating officer received a 5.8% increase, (iii) our chief financial officer received a 10% increase, to align with comparable market values; (iv) our president of our SaaS division, who was promoted to this position in August 2021, received a 25.7% increase to reflect his increased responsibilities and the high demand for digital healthcare talent; and (v) our president of respiratory and sleep care, who was promoted to this position in July 2022, received a $1.4 million equity award, to recognize her increased responsibilities and to move her closer to market for her new position following her July 1 promotion, as well as a $725,000 annual equity award granted in November 2022. The following table sets forth annual equity grant values provided to our named executive officers in fiscal year 2023, as well as the elections made by our named executive officers regarding the form of award to receive. When it approved the 2023 equity grants in August 2022, the committee approved specific dollar values, and a valuation firm used those values and estimated inputs to calculate the specific number of stock options, RSUs, or PSUs to be granted based on its estimate of the value of the awards on the November 2022 grant date. The intended values approved by the committee and the actual grant date values were the same. The table below sets forth the grant values, based on the NYSE closing stock price on the applicable date of the grants, a Black-Scholes formula for the options, the probable outcome of the performance conditions for the RSUs, and a Monte-Carlo simulation for the PSUs, each consistent with the accounting standards of FASB 718. Except as noted for Ms. Blaise's promotional grant, the annual grants set forth in the table below were effective as of November 16, 2022, the date of last year's annual meeting of stockholders.

  49. Elements of compensation

    | Named executive officer | Grant value | Percentage of grant value in performance- based stock units | Percentage of grant value in stock options | Percentage of grant value in restricted stock units | | Michael Farrell | $11,000,000 | 50% | 25% | 25% | | Lucile Blaise | $1,400,000(a) | 50% | 0% | 50% | | Lucile Blaise | $725,000 | 50% | 25% | 25% | | Rob Douglas | $4,760,000 | 50% | 50% | 0% | | Bobby Ghoshal | $2,200,000 | 50% | 25% | 25% | | Brett Sandercock | $2,200,000 | 50% | 0% | 50% |

  50. Terms of performance stock units

    Terms of performance stock units Program design. Equity grants to named executive officers during fiscal year 2023 were made under our ResMed Inc. 2009 Incentive Award Plan, as amended and restated ("2009 Amended and Restated Plan"). Long-term PSUs are granted in November on our annual meeting date as compensation for that same fiscal year. Thus, the PSUs for fiscal year 2023 were granted in November 2022 on structurally the same terms as the PSUs granted in the prior fiscal year. PSUs are earned and cliff vest after the fourth anniversary of the grant based on our absolute TSR performance during that four-year period with an opportunity to accelerate payouts after year three if TSR performance is at or above threshold TSR for the three-year performance period, as shown in the table below. If there is acceleration for TSR performance to three years, then the PSU performance period is complete and there is no opportunity to earn shares after the end of the accelerated three-year period. Since the adoption of this PSU structure in 2015, for each of the PSUs with three-year cycles completed have paid out at the end of the three-year performance period. The PSUs granted in November 2020 (fiscal year 2021), other than the 25% previously earned and banked PSUs, are not currently expected to payout after the three-year accelerated performance period ending November 2023 but will continue for a fourth year to November 2024. The share price at the grant date (our stockholder meeting date) is used as the starting point for the TSR calculation, and a trailing 30 trading-day average share price is used to calculate the share price at the end of each performance period. Commencing with the fiscal 2023 PSUs granted in November 2022, may earn a potential earnout ranging from 0% to 200% (previously 225%) of target PSUs granted, based on the schedule set forth below. The PSUs granted on July 1, 2022 to Ms. Blaise in connection with her promotion to President sleep and respiratory care, were granted before this change and therefore have a maximum earnout of 225%.

  51. Terms of performance stock units

    | TSR requirements | Annual base TSR | Cumulative 4-year TSR | Accelerated cumulative 3-year TSR | Payout percentage of target shares granted | | Below threshold | Below 5% | Less than 21.6% | Less than 15.8% | 0 | | Threshold | 5% | 21.6% | 15.8% | 50% | | Target | 10% | 46.4% | 33.1% | 100% | | Maximum(a) | 15% | 74.9% | 52.1% | 200% |

  52. Terms of performance stock units

    (a) The maximum payout was changed from 225% to 200% effective with grants made in November 2022. Shares earned between these achievement levels are based on linear interpolation. The program has several features to minimize the impact of daily volatility and point-to-point variation, and to encourage accelerated achievement of TSR goals. A 30 trading-day average price is used to measure performance at the end of the period. In addition, if cumulative TSR is 15.8% or greater after three years, representing 5% annual growth required for threshold performance, then threshold is earned, with interpolation for three-year cumulative TSR between approximately 16%, 33%, and 52%, as shown in the chart above. Finally, if, during the first three years, cumulative TSR after grant is greater than 33.1% at the end of any fiscal quarter, representing target performance after three years, then 25% of the target award would be deemed earned, banked, and paid out at the end of year three, even if performance at the end of year three is below the three-year threshold. The banking can only occur once, and any final payout would be net of the banked amount. The rationale for banking this relatively small payout that remains unvested until year three is to retain award holders for at least three years while rewarding targeted stockholder value creation, when stockholders have had the opportunity to realize a minimum level of 33.1% TSR in a short time. Our strong TSR over the three-year performance period ending in fiscal year 2023 resulted in maximum payouts. PSU grants that were earned and vested in November 2022 were made as an annual grant in November 2019 to all named executive officers. The grants paid out based on our maximum TSR performance over the three-year performance period that ended November 13, 2022. Over the three-year performance period ended in November 2022, we delivered absolute TSR of approximately 53.24%, which exceeded the maximum three-year goal of 52% and represented compound annual growth of approximately 15.35%. As a result, the performance period ended after three years, and shares were delivered at the maximum ceiling of 225% of the target number granted. These results are a pay-for-performance outcome, while still appropriately limited by the plan’s design of a maximum ceiling. The payout amount was certified by the committee, after reviewing third-party calculations of the TSR for ResMed. The payout was formulaic and based on the plan’s design, aligning pay delivery with performance, with no discretionary adjustments by the committee. Because of these results, and the increase in share value during the performance period, our executive officers earned shares from the November 2019 PSU grants, as shown in the table below.

  53. Terms of performance stock units

    | Named executive officer | Target number of PSUs at grant | Number of shares earned | | Michael Farrell | 28,057 | 63,129 | | Lucile Blaise (a) | 0 | 0 | | Rob Douglas | 16,397 | 36,894 | | Bobby Ghoshal | 3,644 | 8,199 | | Brett Sandercock | 7,288 | 16,399 |

  54. Terms of performance stock units

    (a) Ms. Blaise was not granted PSUs prior to her promotion on July 1, 2022. The PSU grants made in November 2020 are still outstanding and have 25% banked amounts that have been earned (but not paid). PSU grants made in November 2021 and 2022 also remain outstanding, with no amounts banked as of June 30, 2023. Based on the interim performance of our stock price through June 30, 2023 ($218.50), the November 2021 and 2022 PSUs and the unbanked November 2020 PSUs have performance below threshold and thus would not pay out if the performance period had ended June 30, 2023, demonstrating the tie between pay and performance and the at-risk nature of our executive's compensation. Reduction of maximum payout commencing with fiscal year 2023 PSU Program. The committee determined to decrease the maximum payout under the PSU program from 225% to 200% of target PSUs granted to align with typical market practice, commencing with the fiscal 2023 grants made in November 2022. Relative TSR performance measure over three-year performance period for fiscal year 2024 PSU Program. In August 2023, after consideration of input from our independent compensation consultant and market practices, the compensation committee determined to revise our PSU program effective with the fiscal 2024 grants to be made in November 2023, to include, as 50% of the PSUs to be granted, PSUs that are earned based on our relative TSR performance compared to the TSR performance of the S&P 500 Index over a three-year performance period. Payout would range from 0% to 200% of target PSUs granted, with target relative TSR performance at 60th percentile resulting in 100% payout, and relative performance at 95th percentile or better resulting in 200% payout; provided, however, that if our absolute TSR is negative, then payout cannot exceed 100% regardless of relative percentile performance. As a result of this change, half of our PSU award (or 25% of the overall long term incentive award) will be based on absolute TSR, and half of our PSU award (or 25% of the overall long term incentive award) will be based on relative TSR.

  55. Terms of stock options and restricted stock units

    Terms of stock options and restricted stock units Stock options. During fiscal year 2023, stock options were granted to some of our named executive officers, because they have a choice of options or performance-based RSUs for the 50% of their award that is not contingent on TSR performance. The 2009 Amended and Restated Plan requires that the exercise price of options equal the fair market value on the grant date, as measured by the closing price of our common stock on the NYSE on that date. Stock options granted to named executive officers and certain other senior executives during the November annual grant process become exercisable one-third per year on November 11 of each year after the grant date, subject to the executive’s continued service with us, and have a seven-year term. On a qualifying retirement, options become exercisable pro rata based on the service period. Executives may exercise vested options until the earlier of: (1) expiration of the grant (generally seven years after the date of grant), or (2) one year after separation for any reason (except six months after death in the case of non-US participants, and three years after a qualifying retirement). We do not pay dividends or dividend equivalents on our stock options or any of our equity awards. The committee considers stock options performance-based compensation. The ultimate economic value received by an option recipient depends on our future stock price performance, and could be zero, if the stock price does not increase above the strike price. These features of stock options align our executives’ interests with stockholders’ interests. Restricted stock units. During fiscal year 2023, performance-based RSUs were granted to some of our named executive officers, because they have a choice of options and/or performance-based RSUs for the 50% of their award that is not contingent on TSR performance. The performance conditions require that RSUs are only earned when we meet threshold levels of profitability described in the table below, based on our actual adjusted performance compared to targeted levels of earnings for each of the three performance periods: (1) third fiscal quarter; (2) fourth fiscal quarter; and (3) the third and fourth fiscal quarters combined. One half of the RSUs granted may be earned based on the earnings for each of the third and fourth fiscal quarters. No more than 100% of the RSUs granted may be earned, and once the target is met for a performance period, all RSUs associated with that period are earned. If the target for a performance period is not met, none of the RSUs for that period are earned. However, if the cumulative target for both periods is achieved in either period or in the combined period, 100% of the RSUs granted are earned. Once earned, the RSUs vest in one-third annual increments from the date of the grant, based on continued service with us, such that all earned awards will be vested three years after grant, which facilitates retention. On a qualifying retirement, RSUs vest pro rata based on the service period. We do not pay dividends or dividend equivalents on any of our unvested equity awards including RSUs. In August 2023, the committee determined that the performance condition for the November 2022 RSU grants to executive officers had been met, and 100% of the RSUs granted were earned, as shown in the table below. The earned RSUs remain subject to one-third annual vesting increments from the date of grant, based on continued service.

  56. Terms of stock options and restricted stock units

    | Performance component | Threshold | Approximate actual performance | Percentage earned of RSU award for the metric | | Fiscal year 2023 third quarter adjusted earnings | $165,811,180 | $332,057,086 | 50% | | Fiscal year 2023 fourth quarter adjusted earnings | $186,116,988 | $315,286,663 | 50% | | 2023 third and fourth quarter adjusted earnings | $351,928,168 | $647,343,749 | 100% |

  57. Equity compensation award policies

    Equity compensation award policies The committee’s policy is to generally make its annual equity award grants to named executive officers and non-executive management effective on or about the annual stockholders meeting date. However, it reserves the right to make exceptions and change the policy. In setting this policy the committee considered many factors, including the alignment of this date with the date equity grants are made to directors and our typical December 1 salary adjustment date. This enables management and the committee to combine the salary review process with the equity grant process for consistency and simplicity and to make awards only after performance in the previous year is known and current year budgets and goals are set. Also, the exercise price for options included in the equity grants equals the closing price of our common stock on the actual grant date, and the price on that date is an important input into the valuation of RSUs and PSUs. Given our traditional earnings release date in late October or early November, the stockholders meeting is likely to occur in an open window period, so that the stock price on the grant date is more likely to reflect more recent performance data. Finally, the stockholders meeting date is set and announced several months in advance, providing transparency to the process. The committee has set the annual stockholders meeting date as the target grant date for our annual equity grants, although the actual date when the committee takes formal action to make the grants may vary by a few days from the annual meeting date due to administrative or other factors, but the approval always occurs before the grant date. The committee’s policy on granting incentive awards for promotions, new hire, and other special situations is that the grants must be properly approved before the grant date, and the grant date is to occur on the first business day of the month after the promotion, new hire or other special situation; unless the event occurs on the first business day of the month, in which case the grant may be made as of that day.

  58. Change of control, termination, and retirement arrangements

    Change of control, termination, and retirement arrangements Our named executive officers have limited contractual rights to receive severance payments if employment is terminated, as described below. Change of control agreements. We have change of control agreements with each of our named executive officers and certain other members of our senior management team. The change of control agreements we have with our executive officers provide for double-trigger accelerated vesting for stock options and restricted stock units on a change of control, while performance-based stock units are earned and vested as of the date of the change of control, with the number of units earned based on performance through the date of the change of control. These agreements also provide for double-trigger severance payments with a multiplier (based on position, which for our chief executive officer is two times, and for other named executive officers is one and one-half times) of salary, short-term incentive, and other benefits, to be made to our named executive officers if their employment is terminated under specified circumstances within six months before or one year after a change of control. In fiscal year 2022, after review and consultation with advisors, the committee approved amended change of control agreements with our executive officers, with changes designed to implement certain important workplace protective rights and benefits. The key revisions were: •clarifying that harassment, discrimination, or sexual misconduct qualifies as “cause” for termination, and would preclude severance benefits under the agreement; •confirmed that non-disparagement agreements required as a condition of benefits would allow employees to comment publicly about sexual harassment or other unlawful acts in the workplace; and •added that a post-acquisition change in our remote work policies that would substantially restrict the ability to work remotely would provide “good reason” for the executive to resign and be entitled to severance benefits under the agreement; Our agreements do not contain excise tax gross-up benefits, reflecting the committee’s view of best practice, and in response to views expressed by our stockholders. The agreements include instead a “best pay” limitation, which reduces the severance payments and benefits payable to the extent necessary so that no portion of any payments or benefits payable upon a change of control of our company would be subject to the excise tax under Section 280G of the US Internal Revenue Code if the reduction would result in the net amount payable to the employee being greater than the net amount received without the reduction. The agreements do provide a limited additional lump sum gross-up payment amount to offset any tax obligations attributable to the medical and dental health benefits in the event of a qualifying termination in connection with a change of control. A description of the material terms of our change of control agreements can be found in “Potential payments on termination or change of control.” The committee believes that these agreements are needed to attract and retain senior level candidates considering the relatively specialized nature of our offerings and the continued potential for merger and acquisition activity in the medical technology market sector. Also, the committee believes that the agreements assure appropriate motivation by senior management to evaluate potential transactions that may involve us.

  59. Equity Award Agreement Terms

    Equity Award Agreement Terms Terminations in connection with a change of control. All currently unvested RSUs and stock options will only accelerate vesting on a double-trigger basis, that is, if the executive officer’s employment is terminated under specified circumstances within six months before or one year after a change of control. Terminations not in connection with a change of control. All our grant agreements provide for accelerated vesting of RSUs or stock options on an officer’s death, or permanent disability. Our grant agreements for named executive officers provide that if they terminate service with us for any other reason, they forfeit all stock options or RSUs that were unvested at the time of termination. A terminated officer has until one year after the termination to exercise vested options granted in 2016 or earlier, three years for options granted in 2017 or later, or three years following a qualifying retirement. These post-termination exercise provisions are intended to facilitate financial planning after employment terminates, ensure that the executive would be able to exercise options and sell the underlying shares when not in possession of material non-public information, and provide for orderly retirement planning. Performance-based stock units. Our PSU agreement for executive officers provides that if we terminate the officer for “cause” or the officer terminates employment without “good reason” (as those terms are defined in our change of control agreements and summarized below in “Change of Control, Termination, and Retirement Arrangements”), the PSUs are cancelled. If we terminate the officer other than for cause, or the officer terminates for good reason or for retirement, then the PSUs become earned and vested, on a prorated basis based on the truncated service period, and based on the TSR performance measured over that truncated performance period. If a change of control occurs, the PSUs are earned and vested as of the date of the change of control, with the number of units earned based on performance through the date of the change of control. In the event of death or permanent disability, 100% of the target units vest and are immediately distributed. Treatment of long-term incentives on retirement. All currently outstanding equity grants provide that if an executive retires on or after age 60, with at least five years of continuous service with ResMed, then on retirement, the unvested portion of all equity grants will vest pro rata, reflecting the portion of service periods completed. On a qualifying retirement the exercise period for vested stock options will be extended to the earlier of: (1) 36 months, or (2) the original term. The committee believes these retirement provisions are fair and equitable, avoid undesirably different results for the amount earned by retiring and ongoing award holders, and are consistent with market practices. This treatment of equity on a qualifying retirement applies on the same basis to all similarly-situated employees. Insurance benefits. We provide our named executive officers with supplemental life and disability insurance benefits not generally available to employees outside of the U.S., although the disability insurance is generally available on the same terms to all U.S. employees. The third-party insurance companies that underwrite these policies would be obligated to make payments to an executive if the executive terminated employment with us as a result of death or disability.

  60. Tax considerations

    Tax considerations Section 162(m) of the US Internal Revenue Code limits the US federal income tax deductions of publicly-traded companies to the extent total compensation to its “covered employees” exceeds $1 million in any one year. As part of the Tax Cuts and Jobs Act of 2017, effective for tax years beginning after December 31, 2017 (ResMed’s fiscal year 2019), Section 162(m) was amended to eliminate the “qualified performance-based compensation” exception, and the definition of covered employees was expanded to generally include all named executive officers. California conformed to the federal tax law for taxable years beginning on or after January 1, 2019, subject to certain grandfathered arrangements. While ResMed’s compensation plans were intended to permit the award of deductible performance-based compensation under Section 162(m) before the Tax Cuts and Jobs Act, we may no longer take a deduction for any compensation paid to our covered employees in excess of $1 million. Sections 280G and 4999 of the US Internal Revenue Code impose certain adverse tax consequences on excess parachute payments, which are compensatory payments or benefits that are contingent on a change of control and exceed in the aggregate three times the executive’s average taxable compensation paid by ResMed over the five years before the change of control (the “base amount”). If this “three times base amount” threshold is exceeded, then tax penalties apply to the total payments in excess of one times the base amount. Excess parachute payments are subject to a 20% excise tax that must be withheld from the payment, and our compensation deduction in respect of the excess parachute payments is disallowed. If we were to be subject to a change of control, certain amounts received by our executives (for example, amounts attributable to accelerated vesting of equity grants and certain severance payments) could be excess parachute payments. Our change of control agreements do not provide tax gross-ups to an affected individual for any excise taxes due under the agreement. The agreements include instead a “best pay” limitation, which reduces the severance payments and benefits payable to the extent necessary so that no portion of any payments or benefits payable on a change of control would be subject to excise tax if the reduction would result in the net amount payable to the employee being greater than the net amount received without the reduction. Section 409A of the US Internal Revenue Code requires programs that allow executives to defer a portion of their current income to meet certain requirements regarding risk of forfeiture and election and distribution timing (among other considerations). Section 409A of the US Internal Revenue Code requires that “nonqualified deferred compensation” be deferred and paid under plans or arrangements that satisfy the requirements of the statute with respect to the timing of deferral elections, timing of payments, and certain other matters. Failure to satisfy these requirements can expose employees and other service providers to accelerated income tax liabilities and penalty taxes and interest on their vested compensation under the plans. Accordingly, as a general matter, we intend to design and administer our compensation and benefit plans and arrangements for all of our employees and other service providers, including our named executive officers, so that they are either exempt from, or satisfy the requirements of, Section 409A of the US Internal Revenue Code.

  61. Summary compensation table

    Summary compensation table The following table sets forth summary information concerning the compensation awarded, paid to, or earned by each of our named executive officers for all services rendered in all capacities to us for the fiscal years ended June 30, 2023, 2022, and 2021, if they were a named executive officer during that year. We compensate our executive officers in their residences’ local currency. The compensation amounts for named executive officers based outside of the US are presented in US dollars based on an average annual conversion rate for the relevant fiscal years.

  62. Summary compensation table

    | Name and principal position | Year | Salary(a) | Stock awards(c) | Option awards(d) | Non-equity incentive plan compensation(e) | All other compensation(f) | Total | | Michael Farrell | 2023 | $1,128,211 | $8,249,986 | $2,749,989 | $1,510,264 | $230,191 | $13,868,641 | | Chief executive officer | 2022 | $1,080,608 | $9,000,005 | | $1,349,578 | $229,024 | $11,659,215 | | | 2021 | $1,050,000 | $7,700,011 | | $1,603,000 | $36,315 | $10,389,326 | | Lucile Blaise | 2023 | $478,745 | $1,943,094 | $181,232 | $427,155 | $466,743 | $3,496,969 | | President - Sleep and | | | | | | | | | respiratory care business | | | | | | | | | Rob Douglas | 2023 | $909,125 | $2,379,947 | $2,380,005 | $936,144 | $68,766 | $6,673,987 | | President and chief | 2022 | $882,658 | $3,375,156 | $1,124,988 | $847,982 | $90,104 | $6,320,888 | | operating officer | 2021 | $867,500 | $3,374,963 | $1,125,020 | $1,018,756 | $54,422 | $6,440,661 | | Bobby Ghoshal | 2023 | $600,000 | $1,650,047 | $550,013 | $475,780 | $33,680 | $3,309,520 | | President - SaaS business | 2022 | $568,725 | $1,750,150 | | $512,398 | $28,790 | $2,860,063 | | Brett Sandercock | 2023 | $467,002(b) | $2,200,049 | | $384,705 | $57,934 | $3,109,690 | | Chief financial officer | 2022 | $472,225 | $1,999,936 | | $362,932 | $56,238 | $2,891,331 | | | 2021 | $494,225 | $2,000,056 | | $464,318 | $55,683 | $3,014,282 |

  63. Summary compensation table

    (a)Includes salary deferred under defined contribution retirement plans such as our US 401(k) plan, US deferred compensation plan, and Australia superannuation plan. Had these amounts not been deferred, they would have been payable to the officer in cash during the year. The table shows actual amounts paid in each fiscal year, which run from July 1 to June 30. Annual salary adjustments, when made for a fiscal year, are effective December 1 during that fiscal year. (b)We pay Mr. Sandercock’s base salary in Australian dollars. It is reported here in US dollars based on the fiscal year average annual exchange rates. The average annual exchange rate for fiscal year 2023 was approximately AUD:USD of 1 to 0.6733. Earlier years are reported using the rates disclosed in prior years’ proxy statements. (c)Stock awards include RSUs and PSUs issued under our 2009 Amended and Restated Plan, and are shown at the grant date fair value, as computed under FASB ASC Topic 718. See the footnotes to the “Grants of plan-based awards” table for further information on the valuation of stock awards. Since the PSUs are earned based solely on our TSR, they do not have performance conditions as defined under ASC 718, and so there are not maximum grant date fair values based on performance conditions that differ from the grant date fair values shown. The RSU maximum grant date value is equal to the target value, which is reflected in the table, because the target value is the maximum amount that can be earned under maximum performance under the RSU performance conditions. (d)Option awards represent stock options issued under our 2009 Amended and Restated Plan, valued at the grant date computed under FASB ASC Topic 718, as described in more detail in the footnotes to the “Grants of plan-based awards” table. (e)Represents actual payouts under our performance-based cash short-term incentive plan. (f)The amounts shown consist of our incremental cost for certain specified perquisites for our named executive officers, as follows:

  64. Summary compensation table

    | Named executive officer | Medical exams | Personal use of company aircraft(i) | Sales incentive award(ii) | Sales incentive award tax gross-up(ii) | Company contribution to 401k(k) and non-US retirement(iii) | Insurance premiums(iv) | Relocation expense(v) | | Michael Farrell | - | $168,047 | $14,789 | $3,129 | $13,200 | $31,026 | - | | Lucile Blaise | - | - | $10,000 | $4,661 | $10,439 | $22,974 | $418,668 | | Rob Douglas | $2,665 | - | $16,691 | $5,000 | $13,200 | $31,210 | - | | Bobby Ghoshal | - | - | - | - | $2,002 | $31,678 | - | | Brett Sandercock | $740 | - | - | - | $49,035 | $8,159 | - |

  65. Summary compensation table

    (i)The calculation of the aggregate incremental cost for personal use of company aircraft includes the variable costs incurred as a result of personal flight activity, which includes fuel, trip related maintenance, universal weather monitoring, on-board catering, landing and ramp fees, excise taxes, and all other miscellaneous costs. No incremental cost for personal use of the aircraft is attributed to a named executive officer when the aircraft was scheduled to the destination for a business purpose, except to the extent spouses accompany the executive. Since our aircraft is primarily used for business purposes, the aggregate incremental cost excludes fixed costs, such as the monthly management fee and amortization, because such costs would have been incurred regardless of the personal use. (ii)We provided certain named executive officers with benefits in connection with a sales incentive award travel program which is available to sales, marketing, and other non-executive employees. Amounts represent the cost of participation by executive officers in that program. The cost includes the incremental cost to us of travel, hotel, meals, entertainment and other expenses of the executive officer and the officer’s spouse or guest. The cost shown as gross-up represents the amounts we reimburse the officer for the tax associated with income imputed to the officer in connection with the program. We provide tax gross-ups to all employees who participate in this program. Attendance is part of our officers' management duty and enhances the effectiveness of the sales incentive program. (iii)We contribute to the US 401(k) plan for each of our participating named executive officers on the same terms that apply to all other eligible employees. For fiscal year 2023, we made a discretionary matching contribution to the 401(k) plan in an amount up to 4% of eligible participants’ base salary, normal short-term incentive payments and commissions subject to US Internal Revenue Code limits on the maximum amount of eligible compensation. We also contributed to the ResMed Limited superannuation plan in Australia at the government-mandated rate of 10.5%, based on total base salary, on the same terms that apply to all other eligible employees. (iv)We pay the cost of a long-term disability and life insurance policies that provide benefits for US-based employees (including US-based named executive officers) not generally available to employees outside of the US. Amounts shown represent insurance premiums paid for the fiscal year. (v)These relocation compensation amounts include $11,576 payment for tax advisory and preparation services, $148,712 in relocation fees, and $255,554 in assignment allowance payments that we paid in connection with Ms. Blaise's mobility assignment to the US from France. She localized employment in the US in 2022, and the committee approved ongoing tax advisory services as part of the assignment.

  66. Grants of plan-based awards

    Grants of plan-based awards The following table summarizes all grants of plan-based awards made to our named executive officers for the fiscal year ended June 30, 2023. In the table, PSU refers to our long-term performance-based stock units, RSU refers to performance-based restricted stock units, and STI refers to performance-based short-term cash incentives.

  67. Grants of plan-based awards

    | | | | Estimated future payouts under non-equity incentive plan awards(a) | | | Estimated future payouts under equity incentive plan awards (b)(c)(d) | | | | | | | Named executive officer | Grant date | Grant type | Threshold | Target | Max | Threshold | Target | Max | All other option awards: number of securities underlying options(b)(e) | Exercise price of option awards ($/share) | Grant date fair value of stock and option awards(f)(g) | | Michael Farrell | 11/16/2022 | PSU | | | | 11,192 | 22,384 | 44,768 | | | $5,499,973 | | | 11/16/2022 | RSU | | | | 6,215 | 12,430 | 12,430 | | | $2,750,013 | | | 11/16/2022 | Options | | | | | | | 36,569 | $224.58 | $2,749,989 | | | | STI | $733,337 | $1,466,674 | $2,933,348 | | | | | | | | Lucile Blaise | 11/16/2022 | PSU | | | | 738 | 1,475 | 2,950 | | | $362,422 | | | 11/16/2022 | RSU | | | | 410 | 819 | 819 | | | $181,196 | | | 11/16/2022 | Options | | | | | | | 2,410 | $224.58 | $181,232 | | | 7/1/2022 | PSU | | | | 1,419 | 2,837 | 6,383 | | | $699,633 | | | 7/1/2022 | RSU | | | | 1,647 | 3,294 | 3,294 | | | $699,843 | | | | STI | $191,498 | $382,996 | $765,992 | | | | | | | | Rob Douglas | 11/16/2022 | PSU | | | | 4,843 | 9,686 | 19,372 | | | $2,379,947 | | | 11/16/2022 | Options | | | | | | | 31,649 | $224.58 | $2,380,005 | | | | STI | $454,562 | $909,124 | $1,818,248 | | | | | | | | Bobby Ghoshal | 11/16/2022 | PSU | | | | 2,239 | 4,477 | 8,954 | | | $1,100,044 | | | 11/16/2022 | RSU | | | | 1,243 | 2,486 | 2,486 | | | $550,003 | | | 11/16/2022 | Options | | | | | | | 7,314 | $224.58 | $550,013 | | | | STI | $240,000 | $480,000 | $960,000 | | | | | | | | Brett Sandercock | 11/16/2022 | PSU | | | | 2,239 | 4,477 | 8,954 | | | $1,100,044 | | | 11/16/2022 | RSU | | | | 2,486 | 4,972 | 4,972 | | | $1,100,005 | | | | STI | $186,810 | $373,618 | $747,236 | | | | | | |

  68. Grants of plan-based awards

    (a)Represents potential payouts under our annual performance-based short-term cash incentive plan for fiscal year 2023. Threshold amounts shown are 50% of incentive opportunity, target amounts are 100% of the incentive opportunity, and maximum amounts are 200% of incentive opportunity. No amounts are earned for below threshold performance. Short-term incentive amounts actually earned for fiscal year 2023 are reflected in the Summary Compensation Table under the column entitled "Non-equity incentive plan compensation." (b)Our named executive officers received half the value of their annual equity award as PSUs and may choose to receive the remaining half value of their annual equity award as 100% performance-based RSUs, 100% options, or 50% of each; with the final number of RSUs or options based on their value determined under FASB ASC Topic 718. (c)RSU awards granted in fiscal year 2023 are earned based on performance targets for the third and fourth fiscal quarters of fiscal year 2023. Threshold amounts shown are 50% of the RSUs granted, assuming that only one of the 2023 third quarter or fourth quarter operating profit target is achieved. The target and maximum amounts shown are 100% of the RSUs granted assuming that both the third quarter and fourth quarter targets or the aggregate third and fourth quarter targets are achieved. Based on actual fiscal year 2023 performance, 100% of the units were earned. The earned units will vest annually over three years following the date of grant, subject to the executive's continued service. (d)PSUs granted in fiscal year 2023 are earned based on our absolute TSR performance over a four-year period starting on the grant date (with an opportunity for an early earnout after three years). Threshold amounts shown are 50% of the PSUs granted, target amounts are 100% of the PSUs granted, and maximum amounts are 200% of the PSUs granted for awards granted on November 16, 2022 and 225% of the PSUs granted for awards granted on July 1, 2022. No PSUs are earned for performance below threshold. (e)Stock options granted in fiscal year 2023 have an exercise price equal to the NYSE closing price of our common stock on the grant date; one-third are exercisable on November 11th of each of the three years following the grant date, subject to the executive's continued service. The stock options have a seven-year term. (f)The dollar value of options represents the grant date fair value based on the Black-Scholes model of option valuation, computed in accordance with FASB ASC Topic 718. The actual value, if any, an executive may realize depends on the excess of the stock price over the exercise price on the date the option is exercised. There is no assurance that an executive will realize a value at or near the value the Black-Scholes model estimates. The Black-Scholes model is based on an exercise price of $224.58, reflecting the closing price on the date of grant, and the remaining assumptions shown in footnote 10 "Stockholders Equity" to our financial statements contained in our Form 10-K for the fiscal year ended June 30, 2023, resulting in a grant date fair value per option share of $75.20. (g)The dollar value of RSUs represents the grant date fair value computed under FASB ASC Topic 718, based on the probable outcome of the performance conditions, the closing share price of $224.58 for RSUs granted on November 16, 2022 less the present value of lost dividends of $3.34, resulting in a grant date fair value per share of $221.24. The probable outcome of the performance condition was 100% of target amount and the maximum payout is equal to the target payout. The dollar value for PSUs represents the grant date fair value computed under FASB ASC Topic 718, determined as of the grant date using the Monte-Carlo simulation method, which uses multiple input variables to estimate the probability of meeting the TSR objectives, which is a market condition under FASB ASC Topic 718. For PSUs granted on November 16, 2022, assumes $224.58 share price on the date of grant and estimated Monte Carlo valuation of 109.4% ($245.71 per target PSU), rounded to the nearest share.

  69. Outstanding equity awards at fiscal year-end

    Outstanding equity awards at fiscal year-end The following table summarizes outstanding equity awards held by our named executive officers at June 30, 2023.

  70. Outstanding equity awards at fiscal year-end

    | | Option awards | | | | Stock awards | | | | | Named executive officer | Number of securities underlying unexercised options exercisable | Number of securities underlying unexercised options unexercisable(a) | Option exercise price | Option expiration date | Number of shares or units of stock that have not vested(b) | Market value of shares or units of stock that have not vested(c) | Equity incentive plan awards: number of unearned shares or units of stock that have not vested | Equity incentive plan awards: market value of unearned shares or units of stock that have not vested(c) | | Michael | | 36,569 | $224.58 | 11/16/2029 | 17,680 | $3,863,080 | 12,430(d) | $2,715,955 | | Farrell | 59,894 | | $146.34 | 11/21/2026 | | | 11,192(e) | $2,445,452 | | | 80,092 | | $101.64 | 11/14/2025 | | | 8,261(f) | $1,805,029 | | | 102,781 | | $84.98 | 11/16/2024 | 4,469 | $976,477 | 4,469(g) | $976,367 | | | 31,840 | | $57.76 | 11/16/2023 | | | | | | Lucile | | 2,410 | $224.58 | 11/16/2029 | 1,526 | $333,431 | 819(d) | $178,952 | | Blaise | | | | | | | 738(e) | $161,144 | | | | | | | | | 1,419(h) | $309,942 | | | | | | | | | 3,294(i) | $719,739 | | Rob | | 31,649 | $224.58 | 11/16/2029 | 4,680 | $1,022,580 | | | | Douglas | 5,084 | 10,168 | $263.16 | 11/18/2028 | | | 4,843(e) | $1,058,196 | | | 13,850 | 6,926 | $211.76 | 11/19/2027 | | | 4,131(f) | $902,514 | | | 70,006 | | $146.34 | 11/21/2026 | 2,612 | $570,722 | 2,611(g) | $570,504 | | | 102,975 | | $101.64 | 11/14/2025 | | | | | | | 68,017 | | $84.98 | 11/16/2024 | | | | | | Bobby | | 7,314 | $224.58 | 11/16/2029 | 2,244 | $490,314 | 2,486(d) | $543,191 | | Ghoshal | 7,386 | 3,694 | $211.76 | 11/19/2027 | | | 2,239(e) | $489,112 | | | 7,778 | | $146.34 | 11/21/2026 | | | 1,607(f) | $351,020 | | | 10,297 | | $101.64 | 11/14/2025 | 697 | $152,295 | 696(g) | $152,076 | | | 8,963 | | $95.80 | 04/02/2025 | | | | | | Brett | 22,883 | | $101.64 | 11/14/2025 | 4,160 | $908,960 | 4,972(d) | $1,086,382 | | Sandercock | | | | | | | 2,239(e) | $489,112 | | | | | | | | | 1,836(f) | $401,057 | | | | | | | 1,161 | $253,679 | 1,161(g) | $253,569 |

  71. Outstanding equity awards at fiscal year-end

    (a)The table below shows the vesting schedule for the listed unexercisable options awards, by their expiration dates. Vesting is subject to continued service with the company through the vesting date.

  72. Outstanding equity awards at fiscal year-end

    | Expiration date | Grant date | Remaining vesting schedule | | November 16, 2029 | November 16, 2022 | Three equal installments on November 11 of 2023, 2024 and 2025 | | November 18, 2028 | November 18, 2021 | Two equal installments on November 11 of 2023 and 2024 | | November 19, 2027 | November 19, 2020 | One installment on November 11 of 2023 |

  73. Outstanding equity awards at fiscal year-end

    (b)The number of shares or units of stock that have not vested in this column includes outstanding unvested, but earned, performance-based RSUs and earned and banked PSUs. Earned performance-based RSUs shown were granted in November 2020 and November 2021, and vest in three annual equal increments on November 11 of each year following the grant date. Banked PSUs are earned based on certified absolute TSR achievement during the first three years of the performance period, and are paid after the end of three years. The banked PSUs were granted in November 2020. The table below shows the vesting schedules for these remaining performance-based RSUs and banked PSUs. Vesting is subject to continued service with the company through the vest date.

  74. Outstanding equity awards at fiscal year-end

    | Named executive officer | RSUs vesting during fiscal year 2024 | RSUs vesting during fiscal year 2025 | RSUs vesting during fiscal year 2026 | Banked PSUs vesting during fiscal year 2023 | | Michael Farrell | 11,910 | 5,770 | | 4,469 | | Lucile Blaise | 823 | 471 | 232 | 0 | | Rob Douglas | 3,237 | 1,443 | | 2,612 | | Bobby Ghoshal | 1,122 | 1,122 | | 697 | | Brett Sandercock | 2,877 | 1,283 | | 1,161 |

  75. Outstanding equity awards at fiscal year-end

    (c)The market value is calculated by multiplying the number of RSUs and PSUs by the closing price of our common stock ($218.50) on the NYSE at June 30, 2023, the last business day of fiscal year 2023. (d)Represents RSUs that were granted to our executive officers in November 2022 under our 2009 Amended and Restated Plan and are earned based on earnings performance targets for the third and fourth fiscal quarters of fiscal year 2023. On June 30, 2023, these shares were unearned because the committee had not yet determined whether any target had been achieved. The number of RSUs and market values shown in these columns represent 100% of the RSUs granted, based on the assumption that the targets would be achieved. In fact, the committee determined in August 2023 that the targets were achieved and the RSUs were earned. The earned RSUs are subject to vesting over three years following the November 2022 date of grant based on continuous service with the company through the vest date. Because the information in this table is reported as of June 30, 2023, these shares are shown as unearned in the table. (e)Represents fiscal year 2023 unearned PSUs granted in November 2022, that are eligible to be earned and vest for the four-year performance period ending November 15, 2026, subject to possible acceleration to a three-year performance period, depending on our absolute TSR performance for the performance period. In accordance with SEC rules, PSUs granted November 2022 are shown at 50% of the target PSUs granted, representing the number of PSUs that would be earned at threshold performance as our absolute TSR performance over the interim performance period from November 2022 through June 30, 2023, was below threshold goal. (f)Represents fiscal year 2022 unearned PSUs granted in November 2021 that are eligible to be earned and vest for the four-year performance period ending November 17, 2025, subject to possible acceleration to a three-year performance period, depending on our absolute TSR performance for the performance period. In accordance with SEC rules, PSUs granted November 2020 are shown at 50% of the target PSUs granted, representing the number of PSUs that would be earned at threshold performance, as our absolute TSR performance over the interim performance period from November 2021 through June 30, 2023, was below threshold goal. (g)Represents fiscal year 2021 unearned PSUs granted in November 2020 that are eligible to be earned and vest for the four-year performance period ending November 18, 2024, subject to possible acceleration to a three-year performance period, depending on our absolute TSR performance for the performance period. In accordance with SEC rules, PSUs granted November 2020 are listed at 50% of the target PSUs granted, representing the number of PSUs that would be earned at threshold performance, as our absolute TSR performance over the interim performance period from November 2020 through June 30, 2023, was below threshold goal. Does not include the 25% earned and banked RSUs for this performance period, which are reflected in the unvested column. See footnote (b) above. (h)Represents unearned PSUs granted in July 2022, that are eligible to be earned and vest for the four-year performance period ending June 30, 2026, subject to possible acceleration to a three-year performance period, depending on our absolute TSR performance for the performance period. In accordance with SEC rules, PSUs granted July 2022 are shown at 50% of the target PSUs granted, representing the number of PSUs that would be earned at threshold performance as our absolute TSR performance over the interim performance period from July 2022 through June 30, 2023 was below threshold goal. (i)Represents RSUs that were granted to Ms. Blaise in July 2022 under our 2009 Amended and Restated Plan and are earned based on earnings performance targets for the third and fourth fiscal quarters of fiscal year 2023. On June 30, 2023, these shares were unearned because the committee had not yet determined whether any target had been achieved. The number of RSUs and market values shown in these columns represent 100% of the RSUs granted, based on the assumption that the targets would be achieved. In fact, the committee determined in August 2023 that the targets were achieved and the RSUs were earned. The earned RSUs are subject to vesting over three years following the July 2022 date of grant based on continuous service with the company through the vest date. Because the information in this table is reported as of June 30, 2023, these shares are shown as unearned in the table.

  76. Option exercises and stock vested

    Option exercises and stock vested The following table summarizes the shares acquired by each of our named executive officers during the fiscal year ended June 30, 2023, by exercising options or by the vesting of RSUs or PSUs.

  77. Option exercises and stock vested

    | | Option Awards | | Stock Awards | | | Named executive officer | Number of shares acquired on exercise | Value realized on exercise(a) | Number of shares acquired on vesting | Value realized upon vesting(b) | | Michael Farrell | 68,100 | $11,200,148 | 79,517 | $17,856,397 | | Lucile Blaise | 0 | $0 | 1,338 | $300,650 | | Rob Douglas | 54,098 | $8,977,203 | 40,130 | $9,007,696 | | Bobby Ghoshal | 0 | $0 | 9,903 | $2,223,562 | | Brett Sandercock | 10,000 | $1,786,550 | 21,603 | $4,851,772 |

  78. Option exercises and stock vested

    (a)Represents the aggregate of the market price at exercise, less the exercise price, for each share exercised. (b)Represents the value deemed realized based on the closing price of our common stock on the date of vesting multiplied by the number of shares vested.

  79. Nonqualified deferred compensation

    Nonqualified deferred compensation We maintain a deferred compensation plan which allows participants to defer receiving some of their eligible compensation to a future date, with an opportunity to earn tax-deferred returns on the deferrals. The following table sets forth summary information regarding our named executive officers’ contributions to, and account balances under, our deferred compensation plan for and as of the fiscal year ended June 30, 2023.

  80. Nonqualified deferred compensation

    | Named executive officer | Executive contributions in fiscal year 2023(a) | Registrant contributions in fiscal year 2023(b) | Aggregate earnings in fiscal year 2023(c) | Aggregate withdrawals/ distributions | Aggregate balance at end of fiscal year 2023(d) | | Michael Farrell | $0 | $0 | $0 | $0 | $0 | | Lucile Blaise | $0 | $0 | $0 | $0 | $0 | | Rob Douglas | $468,072 | $0 | $298,643 | $0 | $3,594,550 | | Bobby Ghoshal | $309,226 | $0 | $234,095 | $30,616 | $1,996,514 | | Brett Sandercock | $0 | $0 | $0 | $0 | $0 |

  81. Nonqualified deferred compensation

    (a) Represents amounts that the named executive officers elected to defer in fiscal 2023. These amounts represent compensation earned by the named executive officers in fiscal 2023, and are also reported in the "Salary" or "Non-equity incentive plan compensation" columns in the “Summary Compensation Table” above. (b) Represents amounts credited in fiscal 2023 as company contributions to the accounts of the named executive officer. Any amounts would be also reported in the “Summary Compensation Table” above under the “All Other Compensation" column. (c) Represents net amounts credited to the named executive officers’ accounts as a result of performance of the investment vehicles in which their accounts were deemed invested, as more fully described in the narrative disclosure below. These amounts do not represent above-market earnings, and thus are not reported in the “Summary Compensation Table.” (d) Aggregate balance as of June 30, 2023 includes all contributions from earned income through fiscal 2023 and investment income reported by June 30, 2023. These balances include the following aggregate amounts that are reported as compensation in this proxy statement in the "Summary Compensation Table" for fiscal years 2023, 2022, and 2021. ($1,401,401 for Mr. Douglas, and $612,393 for Mr. Ghoshal). General. We designed our deferred compensation plan to attract and retain key employees by providing participants an opportunity to defer receipt of a portion of their salary, short-term incentive cash payments, and commissions. The plan is an unfunded plan for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. Deferred amounts under the plan are our general unsecured obligations and are subject to our ongoing financial solvency. Employees who are part of a select group of management or highly compensated employees are eligible to participate in the deferred compensation plan. Contributions. Participants may elect to defer up to 75% of each of base salary, short-term incentive cash payments, and commissions for the plan year. Although the plan permits us to make discretionary contributions from time to time, during fiscal 2023, we did not make any discretionary contributions. Distributions. Participants may elect to take distributions on: (1) participant’s separation from service with us; (2) a specified date; (3) participant’s permanent disability; (4) participant’s death; (5) change of control of ResMed; or (6) unforeseeable emergency. Participants will receive a lump sum payment of those benefits, or if elected by the participant, in installments. Notwithstanding other elections, all distributions due to death or permanent disability will be payable in a single lump sum. Vesting. Participants are always 100% vested in amounts they defer. Participants are vested in discretionary contributions according to vesting schedules established by the plan’s administrative committee; however, discretionary contributions will become 100% vested on the earliest to occur of: (1) the participant’s death; (2) the participant’s permanent disability; or (3) a change of control of ResMed. Investment options. Earnings on amounts contributed to our deferred compensation plan are based on participant selections among the investment options determined by the plan’s administrative committee. This committee has the sole discretion to discontinue, substitute, or add investment options at any time. Participants can select from among these investment options for purposes of determining the earnings or losses that we will credit to their plan accounts, but they do not have an ownership interest in the investment options they select. No “above market” crediting rates are offered under the deferred compensation plan. Invested amounts may be transferred among available plan investment options. The investment options under the deferred compensation plan and their annual rates of return for fiscal year 2023 are in the table below:

  82. Nonqualified deferred compensation

    | Name of investment option | Rate of return through June 30, 2023 | | Vanguard VIF Total Bond Mkt Index | -0.87% | | MFS VIT Total Return Bond | 0.21% | | DFA VIT Inflation-Protection Securities Instl | -1.36% | | MFS VIT Value Svc | 10.40% | | Fidelity VIP Index 500 Initial | 19.49% | | American Funds IS Growth 2 | 24.80% | | American Century VP Mid Cap Value I | 10.25% | | Vanguard VIF Mid-Cap Index | 13.60% | | Empower T. Rowe Price Mid Cap Growth | 17.08% | | Delaware VIP Small Cap Value Series Svc (a) | 7.40% | | Empower S&P Small Cap 600 Index Inv | 9.27% | | Vanguard VIF Small Company Growth Inv | 18.78% | | Vanguard VIF Total Intl Stk Mkt Index | 12.35% | | MFS VIT II International Intrs Value Init | 17.61% | | Vanguard VIF International | 14.68% |

  83. Potential payments on termination or change of control

    Potential payments on termination or change of control Change of control agreements. We have maintained agreements with each of our named executive officers and certain other members of senior management (a total of 17 currently employed persons as of September 20, 2023), that provide certain change of control payments and benefits. The term of each agreement is for three years commencing March 1, 2022, with automatic three-year renewal terms. In accordance with best practices regarding acceleration of equity in connection with a change of control, these agreements generally provide for double-trigger acceleration of time-vested equity, while performance-based stock units are earned and vested as of the date of the change of control, with the number of units earned based on performance through the date of the change of control. If at any time during the period that starts six months before and ends one year after the effective date of a “change of control,” an executive terminates employment under certain conditions described below, then the executive will be entitled to receive certain compensation and benefits from us. The conditions that entitle an executive to additional compensation (a "qualifying termination") are: •the executive voluntarily terminates employment for “good reason” (as defined in the agreement and summarized below); or •we terminate the executive’s employment other than for “cause” (as defined in the agreement and summarized below); or •we terminate the executive’s employment other than for “cause” before the change of control, and the termination is at the request of the successor entity or is otherwise in anticipation of the change of control. In the event of a qualifying termination, the executive will be entitled to compensation and benefits, including the following: •the pro rata portion of short-term incentive amounts earned through the date of termination; •a severance payment equal to two times (in the case of our chief executive officer), or one and one-half times (in the cases of the other named executive officers), the sum of the executive’s: ◦highest annual rate of base salary paid to the executive during the three-year period ending on the date the executive is terminated (the “termination base salary”); plus ◦the higher of (1) the highest actual short-term incentive amounts received by the executive during the past three years before the year of termination; or (2) a specified percentage of the termination base salary (130% in the case of our chief executive officer, and from 80% to 100% in the case of our other named executive officers); plus ◦the annual amount we would be required to contribute on the executive’s behalf under any pension, 401(k), deferred compensation, and other retirement plans based on the executive’s termination base salary. •the executive will become fully vested in accrued benefits under all pension, 401(k), deferred compensation, and any other retirement plans maintained by us; •all of the executive’s unvested stock options, and shares of restricted stock, RSUs, and performance units will vest in full, except that performance units are earned based on actual TSR performance employing a truncated performance period (through the date of the termination) compared to adjusted goals based on the required compound annualized growth rates that reflect the truncated period, each as of the termination date; •we will provide medical and dental health benefits for two years (for our chief executive officer) or one and one-half years (for the other named executive officers) following the termination date, plus an additional lump sum gross-up payment amount to offset any tax obligations attributable to the medical and dental health benefits; and •the agreement has a “best pay” provision, so that severance payments will be reduced to the extent necessary so that no portion of any payments payable upon a change of control would be subject to the excise tax under Section 280G of the Internal Revenue Code, if the reduction would result in the net amount payable to the employee being greater than the net amount received without the reduction. All payments under the change of control agreements are designed to be paid in lump sum, subject to certain restrictions set forth in US Internal Revenue Code section 409A. Throughout the change of control payout period (two years for our chief executive officer, and one and one-half years for the other named executive officers), the executive will be obligated not to induce any person in our employment to terminate employment or accept employment with anyone other than us or, subject to certain limited exceptions, engage in any business or activity or render any services or provide any advice to any person, activity, business or entity that directly or indirectly competes in any material manner with us, or meaningfully support any person, business, entity or activity or initiate or further that competing business or activity. The restriction on post-termination employment will not apply to executives residing in California, to the extent the restriction is not consistent with California law. In addition, as a condition to payment and providing any benefits under the agreements, the executive must deliver a general release of claims in favor of us. The agreements’ initial terms expire on the effective date’s third anniversary. Unless either party gives notice of its intention not to renew, the term will be automatically extended for successive three-year periods. All our currently-employed named executive officers’ agreements expire March 1, 2025, except for Ms. Blaise and Mr. Rider, whose agreements expire July 1, 2025, and July 1, 2026, respectively. All executive officers' agreements are subject to auto-renewal. “Cause” is generally defined as the executive’s (a) conviction or plea of guilty or nolo contendere of a misdemeanor involving moral turpitude, dishonesty or a breach of trust; (b) commission of any act of theft, fraud, embezzlement or misappropriation against us; (c) failure to devote substantially all of the executive’s business time to our business affairs or material breach of the terms of any employment-related agreement; (d) failure to comply with any corporate policies that results or is likely to result in substantial injury, financial or otherwise, to us or our reputation, or a violation of any corporate policy relating to harassment, discrimination, or sexual misconduct; (e) unauthorized disclosure or use of our confidential information, that results or is likely to result in substantial injury, financial or otherwise, to us or our reputation; (f) violation of any rules or regulations of any governmental or regulatory body, that results or is likely to result in substantial injury, financial or otherwise, to us or our reputation; or (g) abuse of drugs, alcohol or illegal substances that results or is likely to result in substantial injury, financial or otherwise, to us or our reputation.

  84. Potential payments on termination or change of control

    A “change of control” is generally defined as (a) a transaction or series of transactions whereby any person or related group of people directly or indirectly acquires beneficial ownership of our securities possessing more than 50% of the total combined voting power of our securities outstanding immediately after the acquisition, subject to certain exceptions; (b) individuals who currently constitute the board cease for any reason to constitute at least a majority of the board, subject to certain exceptions; (c) the consummation by us of (1) a merger, consolidation, reorganization, or business combination, subject to certain exceptions; (2) a sale or other disposition of all or substantially all of our assets in any single transaction or series of related transactions, subject to certain exceptions; or (3) the acquisition of assets or stock of another entity, subject to certain exceptions; or (d) our stockholders approve a liquidation or dissolution of us. “Good reason” is generally defined as (a) the assignment to an executive of duties, responsibilities, authority, or reporting relationship that are materially diminished when compared to the executive’s duties, responsibilities, authority, or reporting relationship immediately before the change of control (including no longer reporting to the chief executive officer or board of the parent company), except in connection with the termination of the executive’s employment for cause, death or disability, or by the executive other than for good reason; (b) a material reduction in the executive’s base salary as in effect at the time of the change of control; (c) any material diminution in the aggregate benefits provided to the executive under benefit plans and arrangements in which the executive is participating at the time of the change of control, unless an equitable arrangement (in an ongoing substitute or alternative plan) has been made with respect to the plan or arrangement; (d) any failure to continue in effect, or any material reduction in target short-term incentive opportunity or any material increase in target performance objectives under, any short-term incentive or incentive plan or arrangement in which the executive is participating at the time of the change of control, which results in a material negative change in the executive’s short-term incentive or incentive compensation, unless an equitable arrangement (in an ongoing substitute or alternative plan) has been made with respect to such plan or arrangement with a comparable target short-term incentive opportunity and comparable target performance objectives; (e) any material diminution in the budget over which the executive retains authority at the time of the change of control; (f) any action that requires either (i) the executive be based at least 50 miles away from both the executive’s office location and executive’s primary residence; or (ii) a change in the company's remote work policies that substantially restricts the executive’s ability to perform their duties and responsibilities remotely; (g) any failure to obtain the assumption of the change of control agreement by any successor or assign of ResMed; or (h) any other action or inaction by ResMed that constitutes a material breach of the change of control agreement under which the executive provides services at the time of the change of control. Equity award terms – options and RSUs. Stock option and RSU grant agreements provide accelerated vesting only on termination due to death or permanent disability, or on a termination in connection with a change of control and qualifying under the double-trigger benefits described in the section “Change of control agreements” above. On a qualifying retirement, RSU grants and option awards will vest pro rata, based on the number of days employed during the vesting period, and vested options granted in fiscal year 2018 and later may be exercised until the earlier of (1) 36 months after retirement or (2) the original grant term. For these purposes, a “qualifying retirement” occurs when an employee terminates service after (a) sixty years of age and (b) completion of five years of continuous service with us. For grants made in fiscal year 2017 and earlier, our forms of option agreement did not extend the exercise period after a qualifying retirement. These existing grant agreements have not been modified, and these legacy option grant agreements will continue to apply until the covered awards have been exercised. Equity award terms – long-term PSUs. Our form of PSU agreement provides that in the event of a change of control, death, permanent disability, an involuntary termination without cause, voluntary termination for good reason, or a qualifying retirement, the following terms and number of units earned in these situations are calculated as follows: •Change of control: TSR performance is measured by compound annual growth rate through the date of the change of control, compared to pro-rated goals that reflect the truncated period, which determines the number of units earned. •Death or permanent disability: 100% of target units are earned as of the date of the event. •Termination by company without cause or by executive for good reason (other than in connection with a change of control) or for qualifying retirement: TSR performance is measured through the date of termination, compared to a prorated performance target that reflect the truncated period, and the number of units so earned are then pro-rated based on the length of executive’s service during the performance period. •Termination by company for cause or by executive without good reason: all unearned units are forfeited. “Cause” and “good reason” are defined the same as in our change of control agreements described above. We believe that adjusting pro rata the target and performance period measurement for PSUs in the absence of a change of control for involuntary terminations without cause, voluntary terminations for good reason, or qualifying retirement, but requiring forfeitures for terminations with cause or resignations without good reason, is an appropriate balance that reflects partial service during the vesting period of the PSUs, while maintaining the performance incentives. We also believe that measuring TSR performance by compound annual growth rate through the date of a change of control, with no proration for the service period, better reflects the performance nature of the incentive, while recognizing that a change of control disrupts the performance metric for future periods.

  85. Potential payments on termination or change of control

    Estimated value of benefits. The following table presents our reasonable estimate of the benefits payable to our named executive officers under our agreements, assuming that the triggering event (either a change of control, a qualifying termination in connection with a change of control, death or disability, or a qualifying termination not in connection with a change of control) occurred on June 30, 2023, the last business day of fiscal year 2023. Our closing stock price on the NYSE on June 30, 2023 was $218.50. The table excludes benefits provided to all employees, such as accrued vacation, and benefits provided by third parties under our health and other insurance policies available to all employees. It also excludes the value of the named executive officer’s deferred compensation account, which would be payable on termination of employment for any reason. While we have made reasonable assumptions regarding the amounts payable, there can be no assurance that in the event of a triggering event our named executive officers would receive, in addition to the cash compensation earned for the period, the amounts reflected below. The compensation amounts for our Australia-based named executive officer is presented in US dollars based on the exchange rate in effect at the close of business June 30, 2023 of .6898 USD to 1 AUD. Ms. Blaise's change in control with qualifying termination is adjusted to the base period amount to implement our "best pay" tax provision.

  86. Potential payments on termination or change of control

    | Named executive officer | Triggering event | Cash severance(a) | Health and insurance(b) | Health tax gross up(b) | Retirement plan contributions(c) | Value of option, RSU, and PSU acceleration(d) | Total value(e) | | Michael Farrell | Change of control | $0 | $0 | $0 | $0 | $976,477 | $976,477 | | | Change of control and qualifying termination | $7,005,014 | $58,354 | $57,382 | $26,400 | $7,333,171 | $14,480,321 | | | Disability | $0 | $1,489,010 | $0 | $0 | $18,763,343 | $20,252,353 | | | Death | | $500,000 | | | $18,763,343 | $19,263,343 | | | Qualifying termination (without change of control) | $0 | $0 | $0 | $0 | $976,477 | $976,477 | | Lucile Blaise | Change of control | $0 | $0 | $0 | $0 | $0 | $0 | | | Change of control and qualifying termination | $1,697,500 | $48,936 | $48,121 | $19,800 | $1,232,124 | $2,579,374(f) | | | Disability | $0 | $1,411,150 | $0 | $0 | $2,123,605 | $3,534,755 | | | Death | | $500,000 | | | $2,123,605 | $2,623,605 | | | Qualifying termination (without change of control) | $0 | $0 | $0 | $0 | $0 | $0 | | Rob Douglas | Change of control | $0 | $0 | $0 | $0 | $570,722 | $570,722 | | | Change of control and qualifying termination | $3,860,912 | $44,239 | $43,502 | $19,800 | $1,639,984 | $5,608,437 | | | Disability | $0 | $274,787 | $0 | $0 | $7,273,134 | $7,547,921 | | | Death | | $500,000 | | | $7,273,134 | $7,773,134 | | | Qualifying termination (without change of control) and retirement | $0 | $0 | $0 | $0 | $1,043,472 | $1,043,472 | | Bobby Ghoshal | Change of control | $0 | $0 | $0 | $0 | $226,488 | $226,488 | | | Change of control and qualifying termination | $2,148,597 | $44,239 | $43,502 | $19,800 | $1,259,994 | $3,516,132 | | | Disability | $0 | $1,244,408 | $0 | $0 | $3,396,707 | $4,641,115 | | | Death | | $500,000 | | | $3,396,707 | $3,896,707 | | | Qualifying termination (without change of control) | $0 | $0 | $0 | $0 | $152,295 | $152,295 | | Brett Sandercock | Change of control | $0 | $0 | $0 | $0 | $2,249,023 | $2,249,023 | | | Change of control and qualifying termination | $1,769,458 | $13,677 | $0 | $72,853 | $2,249,023 | $4,105,011 | | | Disability | $0 | $336,635 | $0 | $0 | $4,790,179 | $5,126,814 | | | Death | | $336,635 | | | $4,790,179 | $5,126,814 | | | Qualifying termination (without change of control) | $0 | $0 | $0 | $0 | $253,679 | $253,679 |

  87. Potential payments on termination or change of control

    (a)Represents the dollar value of cash severance for all officers based on (i) the actual cash incentive earned as of June 30, 2023, plus (ii) their applicable multiple times (a) base salary as of June 30, 2023 plus (b) highest short-term cash incentive payout in the past three years, which occurred in Fiscal 2020, and (c) 401(k) or attenuation plan contributions, as applicable, for one year based on the officer's base salary. (b)For our U.S.-based executives, represents continued medical and dental benefits for the payout period, based on our current costs to provide such coverage. When the triggering event is due to a change of control and qualifying termination, the amount includes a tax gross-up. When the triggering event is termination due to disability, also includes the present value of monthly payments of executive disability through age 65 using the long-term applicable federal rate for June 30, 2023. When the triggering event is termination due to death, includes the life insurance proceeds payable upon death. Mr. Sandercock, located in Australia, is covered under a separate retirement plan for these benefits and does not receive these benefits under these scenarios. (c)Represents the dollar value of retirement plan contributions (US 401(k) and Australian superannuation plan), under the formula described above and based on the executive’s termination base salary. (d)The value of accelerated vesting of equity awards is based on closing price of our common stock on the NYSE on June 30, 2023, of $218.50. Includes banked PSUs earned at target that are unvested. For change of control only, and for a change of control with qualifying termination, the value of PSUs reflects the earning of outstanding PSUs based on our TSR performance as of such date as compared to adjusted goals based on the required compound annualized growth rates for the truncated period. The value of PSUs for a qualifying termination (without change of control) and for retirement is also based on TSR performance as of such date as compared to adjusted goals based on the required compound annualized growth rates for the truncated period, but the number of PSUs is pro-rated for time served during the performance period. Based on the closing price of our common stock on June 30, 2023, the PSUs granted in November 2022 and November 2021 would not have any value, and the PSUs granted in November 2020, other than the 25% banked PSUs, would not have any value. The value of PSUs vesting at termination based on death or disability is calculated by the value of target PSUs at June 30, 2023. The value of full accelerated vesting of outstanding performance-based RSUs and options in the event of death, disability or change of control with qualifying termination, and the value of the pro-rated accelerated vesting of earned performance RSUs and options upon retirement, are based on the June 30, 2023 closing price of our common stock on the NYSE, and for the options, the difference between such closing price and the exercise price. For Mr. Douglas the amounts shown for a qualifying termination (without change of control) would also be payable upon retirement. (e)Excludes the value to the executive of the continued right to indemnification by us. Executives will be indemnified by us and will receive continued coverage under our directors’ and officers’ liability insurance (to the extent applicable). (f)Total value shown for Ms. Blaise in the event of a change of control and qualifying termination is reduced by $467,107 for the required reduction in payout due to the best pay provision. The total value without reduction exceeds the 3x average base period compensation threshold.

  88. Potential payments on termination or change of control

    | OTHER EXECUTIVE COMPENSATION MATTERS |

  89. Chief executive officer pay ratio

    Chief executive officer pay ratio We are providing information about the relationship between the annual total compensation of our chief executive officer and an estimate of the median of the annual total compensation of our other employees. This information is required by the US Dodd-Frank Wall Street Reform and Consumer Protection Act and applicable SEC rules. We have used June 30, 2023, as the date for establishing the employee population used in identifying the median employee and the fiscal year ending on that date as the measurement period. We captured all full-time, part-time and temporary employees as of that date, consisting of 9,778 individuals which excludes 4.9% headcount for certain jurisdictions. We identified the median employee using total target cash including base salary or wages and target incentive payments. The annual total compensation of the median employee for the fiscal year ending June 30, 2023, was $59,197; and the annual total compensation of our chief executive officer for purposes of determining this pay ratio was $13,868,641. The annual total compensation of the median employee and the annual total compensation of the chief executive officer were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Based on this information, for fiscal year 2023, we estimate the ratio of the annual total compensation of our chief executive officer to the annual total compensation of our median employee was 235 to 1.

  90. Pay versus Performance

    Pay versus Performance In accordance with Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between “compensation actually paid” to our CEO, or Principal Executive Officer (PEO), and our other named executive officers (Non-PEO NEOs) and certain financial performance measures for the fiscal years ended on June 30, 2023, June 30, 2022, and June 30, 2021. For further information on ResMed's pay-for-performance philosophy and how executive compensation aligns with Company performance, refer to the above section entitled “Compensation Discussion & Analysis” (“CD&A”).

  91. Pay versus Performance

    | Fiscal Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for non-PEO NEOs (3) | Average Compensation Actually Paid to non-PEO NEOs (4) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($M) | Adjusted Net Sales ($M) (6) | | | | | | | RMD Total Shareholder Return | Dow Jones US Med. Equipment Total Shareholder Return (5) | | | | 2023 | $13,868,641 | $16,867,038 | $4,147,542 | $4,909,275 | $113.80 | $129.79 | $897.6 | $4,163.2 | | 2022 | $11,659,215 | $4,374,620 | $3,625,326 | -$55,486 | $109.18 | $114.04 | $779.4 | $3,616.1 | | 2021 | $10,389,326 | $32,799,199 | $4,165,235 | $12,203,786 | $128.40 | $135.10 | $474.5 | $3,174.3 |

  92. Pay versus Performance

    1.ResMed had one Principal Executive Officer or “PEO”, Mr. Michael Farrell, during fiscal years 2023, 2022, and 2021. 2.SEC rules require certain adjustments be made to the “Total” column as reported in the Summary Compensation Table to determine “Compensation Actually Paid” as reported in the Pay versus Performance Table (“PVP Table”). “Compensation Actually Paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. The equity values are calculated in accordance with ASC Topic 718, with dividends being reflected in the fair value of the award. Valuation assumptions used to calculate fair values used a consistent process as done on the date of grant and were not materially different from those disclosed at the time of grant. The closing stock price of our common stock on June 30, 2020, June 30, 2021, June 30, 2022, and June 30, 2023, was $192.00, $246.52, $209.63 and $218.50. The following tables detail these adjustments for the PEO:

  93. Pay versus Performance

    | PEO | | | | | | | | Prior FYE | 6/30/2020 | | 6/30/2021 | | 6/30/2022 | | | Current FYE | 6/30/2021 | | 6/30/2022 | | 6/30/2023 | | | Fiscal Year | 2021 | | 2022 | | 2023 | | | Summary Compensation Table Total | | 10,389,326 | | 11,659,215 | | 13,868,641 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | | (7,700,011) | | (9,000,005) | | (10,999,975) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | 9,967,171 | | 6,170,624 | | 10,216,009 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | | 15,351,855 | | (5,637,001) | | (1,315,735) | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | — | | — | | — | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | 4,790,858 | | 1,181,787 | | 5,098,098 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | — | | — | | — | | Total Adjustments | | 22,409,873 | | (7,284,595) | | 2,998,397 | | Compensation Actually Paid | | 32,799,199 | | 4,374,620 | | 16,867,038 |

  94. Pay versus Performance

    3. Non-PEO NEOs included for the fiscal years 2023, 2022 and 2021 are reflected in the table below:

  95. Pay versus Performance

    | Fiscal Year | Non-PEO NEOs | | 2023 | Lucile Blaise, Rob Douglas, Bobby Ghoshal, Brett Sandercock | | 2022 | Rob Douglas, Bobby Ghoshal, Jim Hollingshead, David Pendarvis, Brett Sandercock | | 2021 | Rob Douglas, Jim Hollingshead, Brett Sandercock, Raj Sodhi |

  96. Pay versus Performance

    4. As discussed in footnote 2, SEC rules require certain adjustments to be made to determine “compensation actually paid” as reported in the Pay versus Performance table above. The following table details these adjustments to the Average Summary Compensation Table Total for Non-PEO NEOs.

  97. Pay versus Performance

    | Average of Non-PEO NEOs | | | | | | | | Prior FYE | 6/30/2020 | | 6/30/2021 | | 6/30/2022 | | | Current FYE | 6/30/2021 | | 6/30/2022 | | 6/30/2023 | | | Fiscal Year | 2021 | | 2022 | | 2023 | | | Summary Compensation Table Total | | 4,165,235 | | 3,625,326 | | 4,147,542 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | | (2,775,010) | | (2,500,046) | | (2,821,097) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | 3,708,490 | | 1,328,777 | | 2,643,811 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | | 5,495,623 | | (1,432,485) | | (346,310) | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | — | | — | | — | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | 1,609,448 | | 390,289 | | 1,285,329 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | — | | (1,467,347) | | — | | Total Adjustments | | 8,038,551 | | (3,680,812) | | 761,733 | | Compensation Actually Paid | | 12,203,786 | | (55,486) | | 4,909,275 |

  98. Pay versus Performance

    5. The Dow Jones U.S. Medical Equipment index is one of the two index peer groups disclosed in our 10-K and we selected this index as our peer group for purposes of this disclosure, which is comprised of 61 companies from the Dow Jones U.S. Broad Stock Market Index that are classified in the DJICS Medical Equipment subsection. The Company’s fiscal 2023 performance-based long-term incentive program did not use this relative TSR as a financial performance measure. See the CD&A section titled “Long Term Incentives” in this Proxy Statement for additional information. 6. Adjusted Net Sales represents the most important financial performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to our NEOs, including our CEO, for the most recently completed fiscal year to the Company’s performance. Adjusted Net Sales is a non-GAAP measure and is calculated as net sales on a GAAP basis excluding the impact of revenue from acquisitions completed after the establishment of the internal financial plan, as applicable, and foreign currency fluctuations. For a reconciliation of Adjusted Net Sales to the most directly comparable GAAP financial measure and insight into how Adjusted Net Sales is considered by management, please see Page 56 under "Elements of Compensation - Annual Cash Incentive Plan - Incentive Plan Adjustments."

  99. Analysis of the Information Presented in the Pay versus Performance Table

    Analysis of the Information Presented in the Pay versus Performance Table In this section, we provide a graphic analysis showing, for the past three years, the relationship between our PEO’s and the Average of the Non-PEO NEOs’ “Compensation Actually Paid” and (i) the Company’s Adjusted Net Sales, (ii) the Company’s Net Income and (iii) the Company’s TSR, and additionally, the TSR of the Dow Jones U.S. Medical Equipment Index, one of the disclosed peer groups from our 10-K filing. As described in more detail in the CD&A, our executive compensation program reflects a pay-for-performance philosophy that emphasizes long-term equity awards intended to align our executives’ interests with stockholders’ long-term interests. Thus, the value of these awards and, therefore, a large portion of the compensation actual paid to our NEOs is inherently correlated to the Company’s stock price over time. Please refer to the section entitled CD&A above for more information about our executive compensation program.