Qantas 2011 Annual Report Download - page 41

39 ANNUAL REPORT 2011
for the year ended 30 June 2011
Directors’ Report continued
Remuneration Report (Audited) continued
How are LTIP Rights treated if
a change of control occurs?
In the event of a change of control, and to the extent that Rights have not already lapsed, the Board
determines whether the LTIP Rights vest or otherwise.
Other benets such as superannuation, travel and long service leave are detailed on page .
Risk Management
The STIP and the LTIP have design elements that protect against the risk of unintended and unjustied pay outcomes, that is:
— Diversity in their performance measures, which as a suite of measures cannot be directly and imprudently inuenced by one individual employee
— Clear maximums dened for Scorecard outcomes under the STIP, and challenging scale vesting under the LTIP
— Diversity in the timeframes in which performance is measured, with performance under the STIP being measured over one year and
performance under the LTIP being measured over three years
— Deferral of awards under the STIP with a restriction period of up to two years. This creates an alignment with shareholder interests, and also
provides a clawback mechanism in that the Board may lapse restricted STIP awards if they were later found to have been awarded as a
result of material nancial misstatement
While formal management shareholding requirements are not imposed, the CEO has a material holding in Qantas shares, currently valued at
greater than two times FAR. The potential equity awards under the STIP and the LTIP will assist Executives in maintaining shareholdings in Qantas.
Summary of Key Contract Terms
Contract Details
Alan Joyce Bruce
Buchanan
Gareth Evans Rob Gurney Simon Hickey Jayne
Hrdlicka
Lyell Strambi
Contract Length Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing Ongoing
Fixed Annual Remuneration $,, $, $, $,$, $, $,
Notice by Qantas  months  months  months months  months  months months
Notice by Executive  months  months  months  months  months  months  months
Travel Entitlements An annual benet of trips for these Executives and eligible beneciaries during employment, at no cost to the
individual, as follows:
 International  International  International  International  International  International  International
 Domestic  Domestic  Domestic  Domestic  Domestic  Domestic  Domestic
Post employment, the benet is two international and six domestic trips, based on the period of service in a
senior Executive role within the Qantas Group.
STIP “at target” Opportunity % of FAR % of FAR % of FAR % of FAR % of FAR % of FAR % of FAR
LTIP “at target” Opportunity % of FAR % of FAR % of FAR % of FAR % of FAR % of FAR % of FAR
Target Reward Mix
(as a % of total pay)
FAR % %
STIP % %
LTIP % %
. Ms Hrdlicka was appointed to the role of the Group Executive Strategy and Technology effective February .
. In February  Mr Gurney’s role was increased to include responsibility for Qantas Airlines Customer and Marketing. Following this role change, Mr Gurney’s FAR was increased
to $, per annum.
. For Mr Evans and Ms Hrdlicka, notice by Qantas of  months is made up of six months’ written notice plus six months’ severance pay.
 EXECUTIVE REMUNERATION OUTCOMES FOR THE YEAR ENDED  JUNE 
Qantas Performance – STIP Outcomes in /
Underlying PBT for / increased by  per cent to $ million.
Management’s contribution to this result was by way of a combination of co-ordinated responses to the challenges of the year, plus the
successful implementation and achievement of benets from a number of key strategic initiatives:
— Re-allocation of aircraft capacity within the Qantas network to re-establish services impacted by the grounding of A aircraft powered
by Rolls-Royce engines
— Customer care initiatives to assist customers affected by the volcanic ash disruptions, and the earthquake, tsunami, cyclone and ood
events which resulted in such devastation in the key communities and markets that Qantas serves
— Successful roll out of new product and service initiatives such as the implementation of faster, smarter check-in to streamline the journey
of passengers through domestic airport terminals
— New lounge and terminal facilities for customers were launched at Canberra and Perth Airports and at airports in a number of key
regional destinations
— Continued advantage in punctuality performance against domestic competitors
— Expanded use by QantasLink of Bombardier Q aircraft to improve service to regional Australia, and the acquisition during the year
of Network Aviation to increase Qantas’ presence in and service in the y-in, y-out market
— Successful launch by Jetstar of long-haul services between Singapore and Melbourne, and Singapore and Auckland