Qantas 2015 Annual Report Download - page 41

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QANTAS ANNUAL REPORT 2015
Summary of Key Contract Terms as at 30 June 2015
Contract Details Alan Joyce Tino La Spina1Andrew David1Gareth Evans Lesley Grant Jayne Hrdlicka
Base Pay $2,125,0002$850,000 $850,000 $1,000,000 $800,0003$1,000,000
STIP ‘At Target’ opportunity
expressed as a %
of Base Pay
80% for
2014/2015
50% for
2014/2015
50% for
2014/2015
50% for
2014/2015
50% for
2014/2015
50% for
2014/2015
120% for
2015/2016
80% for
2015/2016
80% for
2015/2016
80% for
2015/2016
80% for
2015/2016
80% for
2015/2016
LTIP ‘At Target’ opportunity
expressed as a %
of Base Pay
120% for
2014/2015
50% for
2014/2015
50% for
2014/2015
80% for
2014/2015
55% for
2014/2015
80% for
2014/2015
80% for
2015/2016
50% for
2015/2016
50% for
2015/2016
50% for
2015/2016
50% for
2015/2016
50% for
2015/2016
Travel entitlements An annual benefit of trips for these Executives and eligible beneficiaries during employment4, at no cost
to the individual, as follows:
4 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul
12 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul
The same benefit is provided for use post-employment, based on the period of service in a senior
Executive role within the Qantas Group.
Notice Employment may be terminated by either the Executive or Qantas by providing six months’ writtennotice5.
Each Executive’s contract includes a provision that limits any termination payment to the statutory limit
prescribed under the Corporations Act 2001.
Severance A severance payment of six months’ Base Pay applies where termination is initiated by Qantas5.
1 Following a restructure of the Executive team during the year, Mr La Spina and Mr David commenced in key management roles on 1 March 2015. Awards under the 2015–2017 LTIP were
made prior to commencing in a key management role.
2 Base Pay for Mr Joyce is $2,125,000. From 1 January 2014, Mr Joyce elected to forgo five per cent of his Base Pay. Therefore, Base Pay was paid using an annual rate of $2,018,750 from
1 January 2014 to 30 June 2015.
3 Base Pay for Ms Grant is $850,000 from 1 July 2015.
4 These flights are not cumulative and will lapse if they are not used during the calendar year in which the entitlement arises.
5 Other than for misconduct or unsatisfactory performance.
Risk Management and Clawback Policy
The STIP and the LTIP have design elements that protect against the risk of unintended and unjustified pay outcomes, that is:
–Diversity in their performance measures, which as a suite of measures cannot be directly and imprudently influenced by one
individual employee
–Clear maximum values specified for scorecard outcomes under the STIP and a challenging vesting scale under the LTIP
–Diversity of the timeframes within 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 a portion of awards under the STIP with a restriction period of up to two years providing an alignment with shareholder
interests.
–While formal management shareholding requirements are not imposed, the CEO has a material holding in Qantas shares which
at 30 June 2015 was valued at more than four times Base Pay. The potential equity awards under the STIP and the LTIP will assist
Executives in maintaining shareholdings in Qantas.
The following Clawback Policy applies in the event of serious misconduct or a material misstatement in Qantas’ financial statements.
The Board may:
–Determine that an Executive forgo some or all awards otherwise due under the STIP
–Deem some or all STIP shares which are subject to the restriction period to be forfeited
–Cause some or all LTIP Rights which have not yet vested to lapse, and/or
–In the case of serious misconduct, cancel any post-employment benefits for the relevant employee(s) where possible
The Remuneration Committee has performed a review of the STIP and LTIP terms and conditions and has modified them to better
enable Qantas to clawback remuneration in accordance with the policy. These changes will apply to all new plans from 1 July 2015.
Employee Share Trading Policy
The Qantas Code of Conduct and Ethics contains Qantas’ Employee Share Trading Policy (Policy).
The Policy prohibits employees from dealing in Qantas securities (or securities of other listed entities) while in possession of material
non-public information relevant to the entity.
In addition, nominated employees (including KMP) are:
–Prohibited from dealing in Qantas securities (or the securities of any Qantas Group listed entity) during defined closed periods
–Required to comply with ‘request to deal’ procedures prior to dealing in Qantas securities (or the securities of any Qantas Group
listed entity) outside of defined closed periods
–Prohibited from hedging or entering into any margin lending arrangement, or entering into any other encumbrances over the
securities of Qantas (or the securities of any Qantas Group listed entity) at any time
DIRECTORS’ REPORT CONTINUED
FOR THE YEAR ENDED 30 JUNE 2015
REMUNERATION REPORT (AUDITED) CONTINUED