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Directors’ Report continued
For the year ended 30 June 2016
REMUNERATION REPORT (AUDITED) CONTINUED
INTRODUCTION
OVERVIEW OF THE EXECUTIVE REMUNERATION FRAMEWORK
The objectives of the Executive Remuneration Framework are to attract, motivate, retain and appropriately reward a capable
Executive team. This is achieved by setting pay opportunity at an appropriate level and by linking remuneration outcomes to
Qantasperformance.
The Qantas Executive Remuneration Framework and the remuneration outcomes for 2015/2016 are summarised as follows:
Executive Remuneration Component Delivery Performance Measures
2015/2016 Remuneration and
Performance Outcomes
Base Pay
A guaranteed salary level
inclusive of superannuation.
A more detailed description
isprovided on page 37.
Cash, superannuation and
other salary sacrifice benefits
(if elected).
An individual’s Base Pay is
afixed/guaranteed element
ofremuneration.
No increases to the Base
Pay of the CEO and most Key
Management Personnel (KMP).
For the period 1 January 2014
to30 June 2015 the CEO forwent
five per cent of Base Pay. This
ceased on 1 July 2015.
Annual Incentive
Referred to as the Short Term
Incentive Plan (STIP).
A more detailed description
isprovided on pages 37 to 38.
STIP ‘At Target’ opportunity
expressed as a percentage
ofBase Pay ranges from
80per cent to 120 per cent.
Two-thirds cash, one-third
shares (with a two year
restriction period).
Each year an Executive
may receive an award
that is a combination of a
cash bonus and an award
of restricted shares if
the Plan’sperformance
conditionsare achieved.
A scorecard of performance
measures.
Underlying PBT is the primary
performance measure (with a
50 per cent weighting).
Other performance
measuresare explicitly
aligned to the execution of
the Qantas Group strategy,
including delivering the Qantas
Transformation program.
2015/16 STIP awards paid with
aSTIP scorecard outcome of
160per cent.
The Underlying PBT measure
was exceeded.
T
argets were achieved or
exceeded across all other
financial and non-financial
categories in the STIP scorecard.
Long Term Incentive
Referred to as the Long Term
Incentive Plan (LTIP).
The LTIP is described in more
detail on pages 38 to 40.
LTIP ‘At Target’ opportunity
expressed as a percentage of
Base Pay ranges from 50 per
cent to 80 per cent on a fair
value basis.
Rights over Qantas shares.
If performance conditions
over a three year period are
achieved, the Rights vest
andconvert to Qantas shares
on a one-for-one basis.
The performance measures
for each of the 2014–2016
LTIP, 2015–2017 LTIP and
2016–2018 LTIP are the
relative Total Shareholder
Return (TSR) performance
ofQantascompared to:
–companies with ordinary
shares included in the S&P/
ASX 100 (ASX100)
–an airline peer group
(Global Listed Airlines)
Full vesting – 100 per cent.
LTIP awards under the
2014–2016 LTIP were tested
as at 30June 2016 and the
performance measures were
achieved in full against both
peer groups.
Therefore, 100 per cent of Rights
vested and converted toshares.
31
QANTAS ANNUAL REPORT 2016