Qantas 2012 Annual Report Download - page 47

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FOR THE YEAR ENDED 30 JUNE 2012
Directors’ Report continued
Long Term Incentive - LTIP Outcome
The 2010-2012 LTIP was tested against the TSR and Earnings Per Share (EPS) performance hurdles as at 30 June 2012 and did not vest.
All Rights in this grant lapsed and the CEO did not receive any shares or payment under this plan.
Therefore, the CEO’s remuneration outcome for 2011/2012 under the long term incentive was nil.
STATUTORY REMUNERATION DISCLOSURES FOR THE CEO
The statutory remuneration disclosures are prepared in accordance with Australian Accounting Standards (AASBs) and differ
significantly from the outcomes for the CEO resulting from performance in 2011/2012 outlined on page 44.
These differences arise due to the accounting treatment of share-based payments (such as the STIP and LTIP). The statutory
disclosures include an accounting remuneration value for:
— Prior years’ STIP awards
Accounting standards require STIP remuneration to be expensed (and therefore included as remuneration) in financial years
which differ from the year of scorecard performance. This creates a disconnect between statutory remuneration and the
remuneration earned from the corresponding years’ financial and non-financial scorecard performance.
In both 2009/2010 and 2010/2011 the Board made considered decisions to not pay a cash bonus and instead awarded entirely
deferred STIP awards. Deferred shares granted under the STIP have a future service period, during which the recipient must
remain employed by the Group for the awards to vest. As a result, part of the value of these prior year awards is accounted
for in 2011/2012.
Therefore, the statutory remuneration includes a value for prior year STIP awards of $2.163 million even though the CEO did not
receive an award under the 2011/12 STIP.
— LTIP awards that have not vested
Accounting standards require LTIP awards be expensed (and therefore included as remuneration) notwithstanding that the Rights
have not met the performance hurdles and have lapsed.
No LTIP awards vested during 2011/2012 and the performance against target for all remaining LTIP plans are below the level
required for vesting. However, a value is still required by accounting standards to be included as statutory remuneration.
Additionally, LTIP awards that will be assessed for vesting in future years are expensed over the three year testing period.
Therefore, the statutory remuneration table includes an accounting value for part of the 2011-2013 and the 2012-2014 LTIP awards.
Testing will be undertaken as at 30 June 2013 and 30 June 2014 to determine whether Mr Joyce receives any shares under
these awards.
As a result, LTIP of $1.134 million is included in the statutory remuneration table even though no LTIP awards vested during 2011/2012.
The following is a summary of the statutory remuneration disclosures for the CEO (the full statutory table is provided on page 49).
Statutory Remuneration Table – CEO
2012
$’000
2011
$’000
At Target Pay
$’000
Base Pay (Cash FAR)1, , ,
STIP , , ,
LTIP ,  ,
PSP2n/a  n/a
Other3  n/a
Total , , ,
1 Reported Cash FAR is FAR of $2,125,000 (2011: $2,060,000) less superannuation contributions of $15,775 (2011: $15,199).
2 The Performance Share Plan (PSP) is a legacy equity plan, which was discontinued in 2009.
3 Includes non-cash benefits (such as travel), annual leave accruals, post employment and other benefits plus superannuation contributions of $15,775 (2011: $15,199).
Remuneration Report (Audited) continued
045