Qantas 2005 Annual Report Download - page 57

Download and view the complete annual report

Please find page 57 of the 2005 Qantas annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

55
Description Rationale
PRIMARY BENEFITS continued
Travel Entitlements
Directors and Specified Executives and their eligible beneficiaries
are entitled to receive a number of international and domestic trips
annually at no cost to the individual concerned.
Travel entitlements provide an effective form of remuneration
as the value to the individual is high and the cost to Qantas is
minimal as the only cash outflow from Qantas is for the associated
taxes and the marginal cost of carrying the passenger.
POST EMPLOYMENT BENEFITS
End of Service Payments
Executive Directors and Specified Executives are entitled to end of
service payments on termination, generally based on FAR, as set
out in individual employment contracts.
End of service payments are considered effective retention
mechanisms. These are payable upon cessation of employment
and provide compensation for constraints regarding working for a
competitor for up to 12 months.
Superannuation Contributions
Statutory and salary sacrifice superannuation payments are made
on behalf of the Specified Directors and Specified Executives.
Statutory requirement.
Travel Entitlements
See commentary above on travel entitlements under
non-cash benefits.
EQUITY BENEFITS
Qantas Deferred Share Plan (DSP)
The DSP Terms & Conditions were approved by shareholders on
17 October 2002. The DSP governs the provision of equity
benefits.
The provision of equity benefits establishes a link between
shareholder value creation, financial performance and Executive
remuneration.
Performance Share Plan1
Deferred shares (Shares) are awarded with the value being a
percentage of FAR, based on the achievement of a Balanced
Scorecard relating to Customer, Operational, People and Financial
performance. Customer satisfaction is measured by reference to
an external survey. The Operational performance (punctuality)
measure relates to the metrics published monthly by the
Government. Financial performance uses an internal cost measure.
People performance is focused on Occupational Health & Safety.
Shares are purchased on-market and are held subject to a holding
lock for 10 years. However, Executives can “call for” the Shares
prior to the expiration of the holding lock, but not before the end
of the financial year in relation to up to one-half of the Shares and
the end of the following financial year in relation to the remaining
Shares. Any dividends paid on the Shares will be distributed to the
relevant Executive.
Generally, any Shares which remain subject to the holding lock will
be forfeited if the relevant Executive ceases employment with the
Qantas Group.
The Balanced Scorecard performance condition aligns Executive
remuneration with value drivers for the Qantas Group without
undue emphasis on the short-term financial targets.
Targets are set at the start of the financial year and readily
available external measures are used where appropriate. Internal
measures are used in relation to key focus areas (Safety and
Sustainable Future Program). The metrics are quantifiable and
provide clarity to Executives on the key priorities for Qantas in
the short to medium-term.
1 Refer footnote 1 on page 54.
Qantas Annual Report 2005
~Directors’ Report~
for the year ended 30 June 2005
DIRECTOR AND EXECUTIVE REMUNERATION DISCLOSURES continued