Telus 2011 Annual Report Download - page 164

160 . TELUS 2011 ANNUAL REPORT
23 RELATED PARTY TRANSACTIONS
Summary schedules, including review of transactions with key management personnel
(a) Investments in significant controlled entities
December 31, December 31, January 1,
As at 2 0 11 2010 2010
Country of
incorporation Per cent of equity held by immediate parent
Parent entity
TELUS Corporation Canada
Controlled entities
TELUS Communications Inc. Canada 10 0 % 100% 100%
TELE-MOBILE COMPANY Canada 10 0% 100% 100%
TELUS Communications Company Canada 10 0% 100% 100%
(b) Transactions with key management personnel
The Company’s key management personnel have authority and respon-
sibility 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, is as follows:
Years ended December 31 (millions) 2 0 11 2010
Short-term benefits $ß 9 $ß11
Post-employment pension(1) and other benefits 3 3
Share-based compensation(2) 16 15
$ß28 $ß29
(1) The Company’s Executive Leadership Team members are members of the
Company’s Pension Plan for Management and Professional Employees of TELUS
Corporation and non-registered, non-contributory supplementary defined benefit
pension plans (Note 14).
(2) For the year ended December 31, 2011, share-based compensation is net of $2
(2010 – $5) of effects of derivatives used to manage share-based compensation
costs (Note 13(b)-(c)).
As disclosed in Note 13, the Company made awards of share-based
compensation in fiscal 2011 and 2010. As most of these awards are cliff-
vesting or graded-vesting and have multi-year requisite service periods,
the expense will be recognized ratably over a period of years and thus
only a portion of the fiscal 2011 and fiscal 2010 awards are included in
the amounts in the table above.
Years ended December 31 (millions) 2 0 11 2010
Total fair value at date of grant of:
Share options awarded $ß – $ß 3
Restricted stock units awarded 15 7
$ß15 $ß10
The liability amounts accrued for share-based compensation awards
to key management personnel are as follows:
December 31, December 31, January 1,
As at (millions) 2 0 11 2010 2010
Restricted stock units $ß12 $ß 7 $ß 5
Net-cash settlement feature
for share options – 3 2
Deferred share units(1) 22 18 12
$ß34 $ß28 $ß19
(1)
The Company’s Directors Share Option and Compensation Plan provides that, in addi-
tion 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, 2011, $3 (2010 – $NIL) was paid
out. Subsequent to December 31, 2011, the Directors Share Option and Compensation
Plan was amended such that a time-limited, deferred payout could be effected.
During the year ended December 31, 2011, key management per-
sonnel exercised 736,908 share options (2010 – 234,359 share options)
which had an intrinsic value of $8 million (2010 – $3 million) at the time
of exer cise, reflecting a weighted average price at the date of exercise of
$50.48 (2010 – $42.85).
The Company’s key management personnel receive telecommuni-
cations 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 50% 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 treatment any different
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.