Qantas 2006 Annual Report Download - page 68

66
Directors’ Report
for the year ended 30 June 2006
DIRECTOR AND EXECUTIVE REMUNERATION DISCLOSURES (AUDITED) CONTINUED
SUMMARY OF KEY CONTRACT TERMS CONTINUED
Key Management Executives
Contract details John Borghetti Kevin Brown David Cox Grant Fenn Alan Joyce
Existing contract end date 31 Dec 2007 Ongoing 30 Nov 2008 31 Oct 2009 30 Oct 2008
Fixed Annual Remuneration
at 30 June 2006 $1,310,000 $800,000 $680,000 $800,000 $720,000
FAR can be taken as cash or non-cash components such as motor vehicles and superannuation contributions.
End of service payments Expressed as number of months FAR if completed at least five years service under a fixed contract.
18 months 12 months 12 months 12 months 12 months
Termination of employment Termination without notice: employment can be terminated immediately without notice (or payment in lieu of notice) if, in the
opinion of the CEO, the Executive is or has been engaged in serious misconduct, becomes bankrupt or makes an arrangement
or composition with creditors, or wilfully and persistently breaches their employment contract.
Termination with notice: employment can be terminated during the contract period with 12 months written notice or
payment in lieu.
Voluntary termination: voluntary termination requires written notice. The contract notice periods are between three and six
months, however Qantas may choose to make payment in lieu.
Mr Brown is entitled to six months FAR (in addition to existing end of service arrangements) if his employment is not
required by an incoming CEO or he is offered a position which is significantly diminished in terms of responsibility.
Included in the 18 months end of service payment for Mr Borghetti is six months FAR that is subject to him remaining in
employment with Qantas until 31 December 2007.
Travel entitlements Key Management Executives and eligible beneficiaries are entitled to between two and four international and six and
12 domestic trips per annum, at no cost to the individual. Post employment the entitlements are two international and six
domestic trips.
Performance Cash Plan For 2005/06 the Board approved an increase to target cash incentive for Mr Borghetti from 30 per cent to 50 per cent of
FAR and for other Key Management Executives from 30 per cent to 40 per cent of FAR. Actual PCP may be greater than or
less than the target amount, as determined by the Remuneration Committee, to reflect achievement of personal key
performance indicators.
ENVIRONMENTAL OBLIGATIONS (UNAUDITED)
The Qantas Group’s operations are subject to a range of Commonwealth, State, Territory and international environmental legislation. The Qantas Group
is committed to a high standard of environmental performance and the Board places particular focus on the environmental aspects of its operations through
the SESC, which is responsible for monitoring compliance with these regulations and reporting to the Board.
The Directors are satisfied that adequate systems are in place for the management of the Qantas Group’s environmental exposures and environmental
performance. The Directors are also satisfied that all relevant licences and permits are held and that appropriate monitoring procedures are in place to ensure
compliance with those licences and permits. Any significant environmental incidents are reported to the Board.
The Directors are not aware of any breaches of any environmental legislation or of any significant environmental incidents during the financial year which
are material in nature.
INDEMNITIES AND INSURANCE (UNAUDITED)
Under the Qantas Constitution, Qantas indemnifies, to the extent permitted by law, each Director and Secretary of Qantas against any liability incurred by that
person as an officer of Qantas.
The Directors listed on pages 36 to 39 and the Secretaries of Qantas, being Brett Johnson and Cassandra Hamlin, have the benefit of the indemnity in the
Qantas Constitution. Members of the Qantas Executive Team listed on page 39 have the benefit of an indemnity to the fullest extent permitted by law and as
approved by the Board of Directors. In respect of non-audit services, KPMG, Qantas’ auditor, has the benefit of an indemnity to the extent KPMG reasonably
relies on information provided by Qantas which is false, misleading or incomplete. No amount has been paid under any of these indemnities during 2005/06 or
to the date of this report.
Qantas has insured against amounts which it may be liable to pay on behalf of Directors and Officers or which it otherwise agrees to pay by way of indemnity.
During the fi nancial year, Qantas paid a premium for Directors’ and Offi cers’ liability insurance policies, which cover all Directors and Offi cers of the Qantas Group.
Details of the nature of the liabilities covered, and the amount of the premium paid in respect of, the Directors’ and Officers’ insurance policies are not
disclosed, as such disclosure is prohibited under the terms of the contracts.