Qantas 2005 Annual Report Download - page 56

54
DIRECTOR AND EXECUTIVE REMUNERATION DISCLOSURES (AUDITED)
The disclosure on pages 54 to 63 (excluding page 61) forms part of the Financial Report as required by AASB 1046 – Director and
Executive Disclosures by Disclosing Entities.
Elements of Remuneration of Specified Directors and Specified Executives
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and Senior Executives.
Set out below is an overview of the elements of remuneration provided to the Directors of Qantas (Specified Directors) and the Executives
throughout the year that had the greatest authority (Specified Executives) other than Executive Directors:
Specified Directors Specified
Elements of Remuneration Non-Executive Executive Executives
Minimum salary level Fixed Annual Remuneration ✔✔✔
Superannuation contributions ✔✔✔
Travel entitlements ✔✔✔
Other benefits ✔✔✔
Short-term incentives Performance Cash Plan (PCP) – ✔✔
Medium-term incentives Performance Share Plan (PSP) – ✔✔
Long-term incentives Performance Rights Plan (PRP) – ✔✔
Legacy plans 2002 Executive Director Long-Term Incentive Plan
(Exec Director LTI)/Senior Manager Long-Term
Incentive Plan (Sen Mgr LTI)
–✔✔
2002 Performance Bonus Plan (2002 Bonus) – ✔✔
Qantas Long-Term Executive Incentive Plan (QLTEIP) – ✔✔
Post employment End of service payments – ✔✔
Travel entitlements ✔✔✔
Description Rationale
PRIMARY BENEFITS
Fixed Annual Remuneration (FAR)
Cash FAR is the FAR remaining after salary sacrifice components
such as motor vehicles and superannuation have been deducted.
Non-Executive Directors (NEDs)
Non-Executive Director FAR is determined within an aggregate
Directors’ fee pool limit. An annual total pool of $2.5 million was
approved by shareholders on 21 October 2004. FAR comprises
Directors’ Fees, Committee Fees and superannuation. For details of
actual FAR paid, see page 58.
FAR and payments to NEDs reflect the demands and
responsibilities which are made of Directors and reflects the advice
of independent remuneration consultants to ensure NED FAR
and payments are appropriate. The level of NED FAR is reviewed
annually.
Executive Directors and Specified Executives
FAR is the guaranteed salary level from which superannuation and
other benefits are deducted through salary sacrifice.
For further information on the Executive Remuneration Philosophy
and Objectives, see page 51.
Performance Cash Plan1
The PCP is a cash incentive and is set as a percentage of FAR
payable on achievement of a financial target. For 2004/05, the
financial target was Return on Total Gross Assets (RoTGA). The
threshold for payment was 90% of target and actual payments
were dependent on individual performance relating to Customer,
Operational, People and Financial goals.
The performance condition of RoTGA, being Earnings before
Depreciation, Rentals, Interest and Tax (EBDRIT) divided by Total
Gross Assets, was chosen for 2004/05 as it measures financial
performance that reflects an appropriate return on capital. Non-
financial measures ensure appropriate balance is reflected in the
Executive’s performance.
Non-Cash Benefits
Includes salary sacrifice components such as motor vehicles,
memberships of appropriate professional associations, travel
entitlements and the accrual of statutory long service leave.
Industry standard travel entitlements are in addition to FAR.
Reflects market practice.
1 Regardless of whether targets are achieved, the Board retains absolute discretion to determine whether any payments and/or rewards are to be made
under the Performance Plan. This discretionary element is in place to take into account adverse external factors that may impact the Qantas Group.
The rationale for this is the Executive Directors and Specified Executives have no control over external global events.
Spirit of Australia
~Directors’ Report~
for the year ended 30 June 2005