Telstra 2007 Annual Report Download - page 94

91
Telstra Corporation Limited and controlled entities
Remuneration Report
For superannuation, in addition to mandatory contributions, the senior executives may voluntarily salary
sacrifice additional amounts, subject to legislative requirements.
Fixed remuneration is reviewed annually as part of the company’s overall remuneration review process and
is assessed against the company’s and the individual’s performance.
For fiscal 2007, the CFO was responsible for reviewing and determining the remuneration of the company
secretary. The company secretary participates in the STI plan and the LTI plan on the terms set out in this
report.
5. Short term incentive (STI)
The STI component delivers reward on achievement of annual performance targets.
How STI is calculated
The senior executives’ STI payment is based on their fixed remuneration, individual STI opportunity
(explained below) and achievements against performance measures. This is illustrated in Figure 2.
Figure 2: Calculating the STI payment
STI opportunity and performance levels required
Depending on the role they perform, each senior executive has an STI opportunity ranging from 120% - 200%
of their fixed remuneration where maximum performance is met. The maximum STI opportunity varies
according to the role.
Figure 3 sets out the performance measures for the STI for fiscal 2007 and explains how these measures have
been tailored to reinforce the links between the requirements of the transformation business strategy and
the level of reward available to senior executives. Each of the performance measures is independent and will
be tested separately.
Figure 3: STI performance measures for fiscal 2007
*In the case of Bruce Akhurst the STI is measured against Sensis Revenue and EBIT contribution which make up 60% of his STI, Telstra STI measures
(as detailed above) make up a further 20% and the remaining 20% is based on individual accountabilities. In the case of Kate McKenzie the
Broadband Marketshare measure is replaced with a Telstra Wholesale specific performance measure.
Remuneration
element
Performance
measures
Weight ing How is it measured? Link to business strategy
STI*
(Cash and
Incentive
Shares)
Company Financial 20% EBITDA - Earnings before
interest, tax, depreciation,
amortisation.
To achieve earnings objective.
Revenue Growth 20% Company revenue and Public
Switched Telephone Network
revenue.
To strengthen existing revenue
streams while driving the
development of new revenue and
overall growth
Network
Transformation
Milestones
25% A mixture of network measures
including Next GTM launch, IP
core deployment, HFC upgrade
and ADSL2+.
To deliver on the transformation
network strategy t hat enables
revenue growth and reduces cost.
Broadband
marketshare
15% The increase in Telstra’s share
of retail broadband customers.
To achieve an increase in Telstra’s
retail broadband marketshare.
Individual
accountabilities
20% The achievement of personal
goals which include business
unit specific targets.
To align the individual’s personal
goals with the business’ goals.
Fixed
remuneration
x=
STI opportunity
%
Performance
against
measures
STI payment
x