Qantas 2004 Annual Report Download - page 67

9. Director and executive disclosures continued
ELEMENTS OF REMUNERATION OF SPECIFIED DIRECTORS AND SPECIFIED EXECUTIVES continued
Description Rationale
PRIMARY BENEFITS
Fees
Non-Executive Director (NED) fees are determined within an Fees and payments to NEDs reflect the demands and responsibilities
aggregate Directors’ fee pool limit. An annual pool of $1.5 million, which are made of Directors and reflects the advice of independent
allocated between Directors’ Fees and Committee Fees was remuneration consultants to ensure NED fees and payments are
approved by shareholders on 17 October 2002. Shareholder appropriate. The level of NED fees are reviewed annually.
approval will be sought at the 2004 AGM to increase this pool.
Cash Fees are the fees remaining after salary sacrifice components
such as motor vehicles and superannuation have been deducted.
Effective 1 July 2003, each Director was paid an annual Fee of $100,000 and the Chairman $400,000. Committee fees were $20,000 per
Committee Membership and $30,000 per Committee Chairmanship. Effective 1 July 2004, the annual fee for each Committee Chairmanship
will increase to $40,000.
Fixed Annual Remuneration (FAR)
Guaranteed salary level from which superannuation and other FAR is set with reference to market data, reflecting the scope of
benefits are deducted through salary sacrifice. the role, the unique value of the role and the performance of the
person in the role. Total remuneration is reviewed annually and the
Cash FAR is the FAR remaining after salary sacrifice components policy is to reflect a middle of the market approach for the top 50
such as motor vehicles and superannuation have been deducted. ASX listed entities.
Performance Cash Plan (PCP)1– Cash Incentive
The cash incentive is set as a percentage of FAR and is payable on T he performance condition of RoTGA being Earnings before
achievement of 90% of the target Return on Total Gross Assets Depreciation, Rentals, Interest and Tax (EBDRIT) divided by Total
(RoTGA) and non-financial performance conditions relating Gross Assets was chosen as it measures financial performance that
to customer, operational and people goals. reflects an appropriate return on capital. Non-financial measures
ensure appropriate balance is reflected in the executive’s performance.
Long-Term Incentive, Share Based Plans
Stock Performance Rights (SPR) Plan – closed in 2004
The cash benefit payable to Executive Directors on termination This performance condition linked remuneration and growth in
after contract end date, or otherwise as determined by the Board. shareholder value.
The benefit was related to growth in the Qantas share price.
The scheme was terminated early at 30 June 2004.
Long-Term Incentive Program (LTIP) – suspended 1999 and closed in 2004
The LTIP granted a notional entitlement to shares. Vesting was This performance condition linked remuneration and growth in
based on Qantas’ Relative Total Shareholder Return (TSR) compared shareholder value.
to ASX 100 entities and global airlines. The value on termination
of employment is based on the number of vested entitlements
and the share price.
Non-Cash benefits
Travel Entitlements
Directors and Specified Executives and their eligible beneficiaries Provides an effective form of remuneration as the value to the
are entitled to receive a number of international and domestic individual is high and the cost to the company is minimal as the
flights annually at no cost. only cash outflow from the company is for the associated taxes
and the marginal cost of carrying the passenger.
Other Benefits
I ncludes salary sacrifice components such as motor vehicles, Reflects market practice.
memberships of appropriate professional associations and the
accrual of statutory long service leave.
1 Refer footnote 1 on page 66.
Qantas Annual Report 2004 65Spirit of Australia
Notes to the Financial Statements continued
for the year ended 30 June 2004