Qantas 2006 Annual Report Download - page 59

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57
Qantas Annual Report 2006
Directors’ Report
for the year ended 30 June 2006
DIRECTOR AND EXECUTIVE REMUNERATION DISCLOSURES (AUDITED)
The disclosure on pages 57 to 66 forms part of the Financial Report as required by AASB 124 Related Party Disclosures.
Elements of Remuneration of Key Management Personnel
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and Senior Executives.
Set out below is an overview of the elements of remuneration provided to the KMP:
Key Management Personnel
Elements of Remuneration
Non-Executive
Directors
Executive
Directors Executives
Minimum salary level Fixed Annual Remuneration ✔✔✔
Superannuation contributions ✔✔✔
Travel entitlements ✔✔✔
Other benefits ✔✔✔
Short-term incentives Performance Cash Plan –✔✔
Medium-term incentives Performance Share Plan –✔✔
Long-term incentives Performance Rights Plan –✔✔
Retention Reward Plan –✔✔
Legacy plans 2002 Executive Director Long-Term Incentive Plan (Exec Director
LTI)/Senior Manager Long-Term Incentive Plan (Sen Mgr LTI) –✔✔
Qantas Long-Term Executive Incentive Plan (QLTEIP) –✔✔
Post employment End of service payments –✔✔
Travel entitlements ✔✔✔
Description Rationale
SHORT-TERM EMPLOYEE BENEFITS
Fixed Annual Remuneration
Cash FAR is the FAR remaining after salary sacrifice components such as
motor vehicles and superannuation have been deducted.
Non-Executive Directors (NEDs)
Non-Executive Director FAR is determined within an aggregate Directors’
fee pool limit. An annual total pool of $2.5 million was approved by
shareholders at the 2004 AGM. FAR comprises Directors’ Fees, Committee
Fees and superannuation. For details of actual FAR paid, see page 61.
FAR and payments to NEDs reflect the demands and responsibilities which
are made of NEDs and reflects the advice of independent remuneration
consultants to ensure NED FAR and salary sacrifice payments are
appropriate. The level of NED FAR is reviewed annually.
Executive Directors and Key Management Executives
FAR is the guaranteed salary level from which superannuation and other
benefits are deducted through salary sacrifice.
FAR is set with reference to market data, reflecting the scope of the role,
the unique value of the role and the performance of the person in the role.
Performance Cash Plan
The PCP is a cash incentive and is set as a percentage of FAR payable on
achievement of a financial target and personal performance objectives. For
2005/06, the financial target was profit before related income tax expense
(PBT). The threshold for payment was 75 per cent of target PBT adjusted
for approved restructuring costs and A-IFRS adjustments and requires
Board approval.
The performance condition of PBT refl ects the use of this measure as the key
budget and fi nancial control measure at segment level across the Qantas
Group. This single measure applies to all Executives.
Non-Cash Benefits
Includes salary sacrifice components such as motor vehicles, memberships of
appropriate professional associations and travel entitlements. Industry
standard travel entitlements are in addition to FAR.
Reflects market practice.