Telstra 2007 Annual Report Download - page 103

100
Telstra Corporation Limited and controlled entities
Remuneration Report
Earnings and shareholder wealth
Earnings are defined in terms of sales revenue, EBITDA and net profit. Shareholder wealth is the total return
to an investor over a given period. It consists of three components: dividends paid, the movement in the
market value of shares over that period, and any return of capital to shareholders, excluding buy-backs.
Figure 9: Our 5 year shareholder wealth and earnings history
(1) Comparatives for fiscal 2006 have been adjusted to reflect the impact of the transit ion to UIG4.
(2) We adopted in fiscal 2006 Australian equivalents to International Financial Reporting Standards (A-IFRS). We restated the comparative information
for the year ended 30 June 2005. The financial years ended 30 June 2004 and 30 June 2003 are presented under the previous Australian Generally
Accepted Account ing Principles (AGAAP).
During the five years to 30 June 2007 we undertook two off-market share buy-backs as part of our capital
management strategy; one on 24 November 2003 (238,241,174 shares) and another on 15 November 2004
(185,284,669 shares) of which purchase consideration was $1,001 million ($4.20 per share) and $750million
($4.05 per share) respectively.
STI results and payments
Financial measures have represented a significant percentage of the STI plan over the last five years and
therefore financial performance has a direct impact on the rewards received through the plan. The financial
measures:
• provide a strong correlation with our ability to increase shareholder returns;
• have a direct impact on our bottom line; and
• are measures over which the executives can exercise control.
The average STI received by senior executives as a percentage of the maximum achievable payment for
achieving those short term measures is reflected in Figure 10.
Figure 10: Average STI payment as a % of maximum payment
(1) This includes both the cash and equity component s.
(2) This includes both the cash and equity components. While the total equity component is included in determining the above percentage, the value
of t he rights to Telstra shares granted in fiscal 2005 will be reflected in remuneration as t he shares vest over their vesting period.
(3) The above calculat ion is made by aggregating the actual STI payment s t o the CEO and KMP’s for the financial year and dividing that by t he
aggregate maximum achievable payment s for those same executives. The result is then expressed as a percentage of the maximum achievable STI
payment.
Year ended
30 June 2007
$m
Year ended
30 June 2006
$m(1)
Year ended
30 June 2005
$m
Yea r ended
30 June 2004
$m (2)
Yea r ended
30 June 2003
$m (2)
Earnings
Sales revenue 23,673 22,712 22,161 20,737 20,495
EBITDA 9,861 9,575 10,464 10,175 9,170
Net profit available to Telstra 3,253 3,183 4,309 4,118 3,429
Shareholder wealth
Share Price ($) 4.59 3.68 5.06 5.03 4.40
Total dividends paid/
declared per share (c)
28.0 34.0 40.0 26.0 27.0
Fiscal
2007
Fiscal
2006
Fiscal
2005
Fiscal
2004
Fiscal
2003
STI received(3) 78.5%
(1) 73.8% 54.6% (2) 31.4% 41.1%