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THE QANTAS GROUP 44
for the year ended 30 June 2011
Directors’ Report continued
 ADDITIONAL INFORMATION
This section provides additional information on the remuneration framework, as it applies to members of the Executive Committee and their
remuneration in /.
STIP – Additional Information
Example Performance
Scorecard Underlying PBT Target The underlying PBT target is based on the annual nancial budget. However
for reasons of commercial sensitivity the annual target is not disclosed.
Underlying PBT is a non-statutory measure which is now being used by the
Board of Directors and Executive Committee to assess and improve the
performance of the Group.
Underlying PBT makes it easier for the Group – and its shareholders – to
identify how well the Group manages those business factors it controls by
eliminating the difculty statutory accounting treatments pose in recording
one-off and high-change factors such as hedge volatility in currencies and
fuel.
Unit Cost Reduction Unit cost remains an area of focus across the business and, as a result,
scorecards include a unit cost reduction performance measure. The unit cost
target is based on the annual nancial budget.
For example, Qantas Airlines’ unit cost performance is calculated as Net
Expenditure divided by Group Available Seat Kilometres (ASKs). To ensure
the measure focuses on the underlying operating activities and efciencies,
the measure excludes the impact of fuel price changes and restructuring
charges.
Operational / Punctuality Punctuality is measured against on-time departures and arrivals targets.
For Qantas Airlines’ and Jetstar’s Executives, the measure relevant to their
business unit is used.
For Corporate Executives a combined gure is used.
Customer Service Customer Service is measured against Net Promoter Score (NPS) targets.
This is a survey based measure of the willingness of customers to promote
services of the company (Qantas and Jetstar in this case) in preference to its
direct competitors.
The target involves a -point improvement on Qantas Airlines’ and Jetstar’s
NPS result compared to the / result.
People / Safety The objective of the People/Safety target is to reduce Lost Time Injury and
Serious Injury rates of our employees.
The targets at a Group level involve reducing the Total Recorded Injury
Frequency Rate by  per cent on the / result and also reducing
the Lost Workday Case Frequency Rate by  per cent.
Calculating a STIP Award
FAR x“At target”
opportunity xScorecard Result x
Individual
Performance
Factor (IPF)
The individual
Executive’s FAR.
An individual’s target
reward under the
STIP, expressed as
a percentage of FAR.
Performance against
the scorecard
(expressed as
a percentage).
At the end of the
year, performance
against KPIs is
assessed and each
Executive is assigned
an IPF based on
their performance.
Across all STIP
participants, IPFs
average to ..
Remuneration Report (Audited) continued