Telstra 2007 Annual Report Download - page 90

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Telstra Corporation Limited and controlled entities
Remuneration Report
The Directors of Telstra Corporation Limited present the Remuneration Report prepared in accordance with
section 300A of the Corporations Act for the Company and the consolidated entity for the year ended 30 June
2007. This Report forms part of the Report of the Directors.
This Remuneration Report contains certain disclosures as required by Accounting Standard AASB 124
“ Related Party Disclosures” as permitted by Corporations Regulation 2M.6.04.
Remuneration Snapshot
Chief Executive Officer and other key management personnel*
Solomon Trujillo
Bruce Akhurst
Kate McKenzie
David Moffatt
Deena Shiff
John Stanhope
David Thodey
Gregory Winn
Chief Executive Officer (CEO)
Chief Executive Officer, Sensis
Group Managing Director, Telstra Wholesale
Group Managing Director, Telstra Consumer & Marketing
Group Managing Director, Telstra Business
CFO and Group Managing Director, Finance & Administration
Group Managing Director, Telstra Business & Government
Chief Operations Officer (COO)
ISSUE SUMMARY DISCUSSION
IN REPORT
Remunerat ion
strategy
Designed to attract and retain key talent in an increasingly globalised market,
whilst at the same time aligning the interests of senior executives with those of
shareholders. For fiscal 2007, the remuneration is closely linked to the broader
business transformation strategy.
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Remunerat ion
structure
A significant proportion of senior executive remuneration is “at risk” based on
achievement of challenging performance hurdles linked to the achievement of
transformation objectives and creation of shareholder value. The “at risk”
component of remuneration has increased as a proportion of total remuneration
for fiscal 2007.
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Fixed
remunerat ion
Set based on the scope of the role and the knowledge, skills and experience of the
relevant senior executive, having regard to market comparisons. Page 90
Short term
incentive
Offers reward based on achievement of annual performance targets linked to the
transformation strategy. For fiscal 2007, senior executives, excluding the CEO and
COO, will receive 25% of their actual STI payment in the form of Telstra Incentive
Shares.
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Long term
incentive
Offers reward where executives deliver sustained shareholder growth and reach key
transformation milestones over a longer term. For fiscal 2007, the LTI comprised a
grant of options, divided into 3 tranches that will be tested over a 2-4 year
performance period. No Options will be exercisable unless a 4 year TSR “ gateway”
is achieved.
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CEO and COO
remunerat ion
Set based on the same strategy and structure as for other senior executives, but
with some differences to reflect the unique and important role of the CEO and COO
in delivering the transformation strategy.
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Linking
remunerat ion and
performance
The key objective of the transformation strategy is to lay the foundations for
sustained increases in earnings and shareholder wealth. Senior executive
remuneration is structured to drive the achievement of the transformation
objectives, with the underlying goal of improving company performance.
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Executive Share
Ownership Policy
This was introduced during fiscal 2007 and requires senior executives to acquire and
retain, over time, a minimum holding of Telstra shares to ensure that senior
executives have a direct personal financial stake in the company’s performance
and that executives’ interests are aligned with those of shareholders.
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