Telus 2010 Annual Report Download - page 168

164 . TELUS 2010 annual report
22 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Summary schedules and review of transactions with key management personnel
The liability amounts accrued for share-based compensation awards
to key management personnel are as follows:
As at December 31 (millions) 2010 2009
Restricted stock units $ß 7 $ß 5
Net-cash settlement feature for share options 3 2
Deferred share units(1) 18 12
$ß28 $ß19
(1) The Company’s Directors Share Option and Compensation Plan provides that, in
addition to their annual equity grant of deferred share units, a director may elect to
receive his or her annual retainer and meeting fees in deferred share units, Non-Voting
Shares or cash. Deferred share units entitle the directors to a specified number of,
or a cash payment based on the value of, TELUS’ Common Shares and Non-Voting
Shares. Deferred share units are paid out and expire when a director ceases to be
a director for any reason.
During the year ended December 31, 2010, key management per-
sonnel exercised 234,359 share options (2009 – 127,000 share options)
which had an intrinsic value of $3 million (2009 – $1 million) at the time
of exercise, reflecting a weighted average price at the date of exercise
of $42.85 (2009 – $32.57).
The Company’s key management personnel receive communications
services from the Company, which are immaterial and domestic in nature.
Employment agreements with members of the Executive Leadership
Team typically provide for severance payments if the executive’s employ-
ment is terminated without cause: 18 months (24 months for the Chief
Executive Officer and the Chief Financial Officer) of base salary, benefits
and accrual of pension service in lieu of notice and fifty per cent of base
salary in lieu of annual cash bonus (other than for the Chief Executive
Officer, who would receive twice the average of the preceding three years’
annual cash bonus). In the event of a change in control (as defined),
the Executive Leadership Team members are not entitled to any differ-
ent treatment than other Company employees with respect to unvested
share-based compensation, other than for the Chief Executive Officer,
whose unvested share-based compensation would immediately vest.
The Company’s key management personnel have authority and
responsibility for overseeing, planning, directing and controlling the
activities of the Company and consist of the Company’s Board of
Directors and the Company’s Executive Leadership Team.
Total compensation expense for key management personnel, and
the composition thereof, for fiscal 2010 and fiscal 2009, is as follows:
For the years ended December 31 (millions) 2010 2009
Short-term benefits $ß11 $ß10
Post-employment pension and other benefits 3 3
Share-based compensation(1) 15 13
$ß29 $ß26
(1) For the year ended December 31, 2010, share-based compensation is net of $5
(2009 – inclusive of $3) of effects of derivatives used to manage share-based
compensation costs (Note 12(b)-(c)).
As disclosed in Note 12, the Company has made awards of share-
based compensation in fiscal 2010 and 2009. As most of these awards
are cliff-vesting the expense will be recognized ratably over a period of
years and thus only a portion of the fiscal 2010 and fiscal 2009 awards
are included in the amounts in the table above.
For the years ended December 31 (millions) 2010 2009
Share options awarded –
total fair value at date of grant $ß 3 $ß3
Restricted stock units awarded –
total fair value at date of grant 7 5
$ß10 $ß8
23 DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Summary schedules and review of differences between Canadian and United States
generally accepted accounting principles as they apply to the Company
in accordance with IFRS-IASB to U.S. GAAP. Upon the commencement
of presenting the Company’s financial statements in accordance with
IFRS-IASB in fiscal 2011, the Company currently expects that it will cease
reconciling its financial statements to U.S. GAAP.
The principles currently adopted in these financial statements
conform in all material respects to those generally accepted in the United
States except as summarized below.
The Consolidated financial statements have been prepared in
accordance with Canadian GAAP. As discussed further in Note 2,
Canadian GAAP is being converged with IFRS-IASB. The United
States Securities and Exchange Commission, effective March 4, 2008,
no longer requires certain reporting issuers, such as the Company,
to reconcile their financial statements included in their filings with the
United States Securities and Exchange Commission and prepared