Telstra 2008 Annual Report Download - page 96

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Telstra Corporation Limited and controlled entities
Remuneration Report
6.5 Results of the Fiscal 2006 and Fiscal 2007 LTI plans
The fiscal 2006 and fiscal 2007 LTI plans reached their first testing point on 30 June 2008 in accordance with the Terms. The Board
assesses each measure that is required to be tested at that time to determine if the performance hurdles have been achieved. The
following table shows the results of the Board’s assessment and the percentage of performance rights and options that have
vested as a result.
As detailed in the above table, the fiscal 2007 LTI plan has options measured against the achievement of stretch EBITDA targets,
year on year, over the life of the plan. In summary, the stretch EBITDA target must be achieved in consecutive years before vesting
can occur.
The first stretch target was not achieved in fiscal 2007 and four consecutive years of stretch target therefore cannot be achieved
resulting in a proportion of options expiring. However, the stretch EBITDA target for fiscal 2008 was achieved and as such the
remaining options are eligible to vest subject to achievement of consecutive years of reaching the stretch EBITDA target. As with
the other performance measures of the fiscal 2007 LTI, no options will be exercisable unless the gateway TSR hurdle of 11.5%
compound annual growth is achieved over the period of the plan.
Please note that vested options under the fiscal 2007 LTI plan cannot be exercised until after 30 June 2010 and only if the minimum
gateway TSR hurdle is achieved.
Fiscal
Year
Measure % of total allocation
tested at 30 June 2008
% vested
2006 Revenue Growth 10% 10%
Expense Growth 10% 0%
Number of OSS / BSS Systems 10% 0%
IP Core & Ethernet 10% 10%
Return on Investment (ROI) (2007/08) 20% 0%
TOTAL 60% 20%
Fiscal
Year
Measure % of total allocation
tested at 30 June 2008
%
provisionally
vested
2007 Transformation Release 1 in production 2.9% 2.9%
Transformation Release 1 conversion 2.9% 0%
Multi Service Edge - Build 1.7% 1.7%
Multi Service Edge – SDN Core Exit 1.7% 1.7%
Ethernet Build 1.7% 1.7%
Revenue Growth – 2 year compound annual
growth
5.0% 5.0%
Total Shareholder Return – 2 year compound
annual growth
4.2% 0%
Stretch EBITDA growth 7.0% 0%
TOTAL 27 % 13%