Qantas 2005 Annual Report Download - page 55

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2005 EXECUTIVE REMUNERATION PHILOSOPHY AND OBJECTIVES continued
Operation of Incentive Plans
Under all of the Executive Incentive Plans operating within Qantas, the Chief Executive Officer may recommend changes to the Board,
which has discretion to amend the operation of the Plan as appropriate, given changes in business circumstances or to recognise a
particular degree of difficulty or the effects of events external to management, in any performance year. Any such change and its
outcome for reward would be disclosed in the relevant Qantas Annual Report.
Total Reward Mix
Consistent with market practice, the proportion of Remuneration attributable to each component of the Performance Plan is dependent
on the level of seniority of the Executive. The total reward mix is as follows:
% of Total Reward Opportunity (at Target)
FAR
%
Performance
Cash Plan
%
Performance
Equity Plan
%
Chief Executive Officer 50 30 20
Chief Financial Officer 55 25 20
Executive General Managers 65 20 15
Other Executives depending on level of seniority 70 to 90 5 to 15 5 to 15
The above table is used to determine the allocation of performance-based remuneration on an annual basis and is based on the
Executive’s FAR at the date of the allocation. It excludes accrual of end of service payments and any non-cash benefits.
This target reward mix reflects remuneration over a holding lock period subject to meeting vesting conditions and does not necessarily
reflect the actual remuneration received by the Executive in the current year.
For those Executives eligible to participate in the Performance Rights Plan, the “at target” component of the Performance Equity Plan is
expected to be delivered in equal proportions via the Performance Share Plan and the Performance Rights Plan.
Concessionary travel entitlements, service payments and retention arrangements
Travel concessions are provided to all Executives within Qantas, consistent with practice in the airline industry. Travel at concessionary
prices is on a sub-load (stand-by) basis, ie subject to considerable restrictions and limits on availability and includes specified direct family
members or parties. There is also a post retirement element of this entitlement for all staff who qualify through retirement or redundancy.
In addition to this and consistent with practice in the airline industry, a small number of Senior Executives are entitled to a number of free
trips for personal purposes and includes specified direct family members or parties. The value of these entitlements is accrued over the
expected service of the individual. Eligibility for new participants is now restricted to members of the Qantas Executive Committee.
The primary elements of retention within Qantas are the provision of appropriate development opportunities for high performing
Executives and the recognition of performance on an ongoing basis through the remuneration programs detailed above. In addition, it is
occasionally appropriate to establish specific milestone reward programs which link agreed performance outcomes to an opportunity for
award either in the form of cash, or by way of special allocations under the Performance Share Plan or Performance Rights Plan.
For Executives appointed to Executive General Manager, fixed term contracts of up to five years are agreed on appointment as a further
element of retention. A limited number of these are eligible for a payment on termination provided they have completed five years
service.
Continuous Improvement
Qantas continually reviews all elements of its Executive Remuneration Philosophy and Objectives to ensure that they are appropriate from
the perspectives of governance, disclosure and reward.
Qantas Annual Report 2005
~Directors’ Report~
for the year ended 30 June 2005