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28
QANTAS ANNUAL REPORT 2015
REMUNERATION REPORT (AUDITED)
DIRECTORS’ REPORT CONTINUED
FOR THE YEAR ENDED 30 JUNE 2015
COVER LETTER TO THE REMUNERATION REPORT
Dear Shareholder,
Qantas is pleased to present its Remuneration Report for 2014/2015, which sets out remuneration information for the Chief
Executive Officer (CEO), direct reports to the CEO (Executive Management) and Non-Executive Directors.
In addition to the detailed Remuneration Report, we have provided an introduction to the Report which contains a summary of:
–The Remuneration Framework and how it was applied for the 2014/2015 financial year
–The remuneration outcomes for the CEO
2014/2015 Remuneration Outcomes
2014/2015 was a very successful year. Management and all employees have performed extremely well, continuing to deliver
great customer experiences whilst transforming the business. Throughout the year, management:
–Continued to deliver on its commitments around transforming the business with the program delivering $894 million of
benefits during 2014/2015 and in doing so returned the business to profitability (delivering an Underlying PBT result of
$975million)
–Continued to invest in both customer product and training our people, and this has been reflected in our record customer
advocacy scores
–Maintained discipline over the allocation of capital, facilitating a $1 billion debt reduction which provided a strong platform
forsustainable growth
These successes have been recognised in our share price which increased by just over 150 per cent during the year. We were the
best performing stock of the S&P/ASX 100 (ASX100) companies during 2014/2015.
The Executive Remuneration Framework is designed to attract, motivate, retain and appropriately reward a capable Executive
team. The 2014/2015 achievements have also been recognised in the remuneration outcomes, as follows:
–Annual incentive awards were made
Bonuses were paid to Executives based on performance against the 2014/15 Short Term Incentive Plan’s (STIP) financial
and non-financial performance measures for 2014/2015. The Board assessed performance against this ‘scorecard’ at
140percent.
–Long Term Incentive Plan (LTIP) awards vested
Rights that were awarded to Executives in 2012 were tested against the Plan’s three year performance measures. Based on
this performance test, 85 per cent of Rights vested and were converted to Qantas shares.
As a result of these remuneration outcomes, the CEO’s statutory remuneration for 2014/2015 totalled $6.70 million. The CEO’s
actual remuneration outcome, which includes $4.56 million of growth in the value of the vested shares to the CEO under the LTIP,
totalled $11.88 million.
It is also worth noting that the freeze on Base Pay (which has been in place since 2011 for the CEO and since 2012 for other
Executives) continued throughout the year. In addition, from 1 January 2014 until 30 June 2015, the CEO elected to forgo five per
cent of his Base Pay and the Chairman and all other Directors elected to forgo five per cent of their fees.
More details of the remuneration outcomes are provided in the Remuneration Report.
The Board remains committed to a remuneration framework that is aligned to the Qantas Group strategy, is performance based,
motivates and appropriately rewards Management, meets shareholders’ requirements and encourages decision-making that is
focused on the longer-term.
Paul Rayner
Chairman, Remuneration Committee