Qantas 2012 Annual Report Download - page 62

FOR THE YEAR ENDED 30 JUNE 2012
Directors’ Report continued
Additional Information – Share-Based Payments
The following table provides a more detailed breakdown of the accounting expense of share-based payments to disclosed Executives.
STIP LTIP PSP1
($000)
Cash-settled
Share-based
Payment
Equity-settled
Share-based
Payment
Equity-settled
Share-based
Payment
Equity-settled
Share-based
Payment Total
Alan Joyce
Chief Executive Officer
 ,  , – ,
 – ,   ,
Gareth Evans
Chief Financial Officer
    – 
 –    
Bruce Buchanan
CEO Jetstar
    – 
 –    
Rob Gurney
Group Executive Qantas Airlines Commercial
   () – 
 –    
Simon Hickey
CEO Qantas Loyalty
    – 
 –    
Jayne Hrdlicka
Group Executive Strategy & Technology
    – 
 – – – – –
Lyell Strambi
Group Executive Qantas Airlines Operations
    – 
 –    
Total  , , , – ,
 – ,   ,
1 The Performance Share Plan (PSP) was discontinued in 2009. It was a medium-term deferred share incentive plan that operated as follows:
– At the start of Year 1, the Qantas Board set performance targets for each Balanced Scorecard measure
– At the conclusion of Year 1, the Board assessed performance against each target and awarded deferred shares to Executives if targets were achieved
– Any deferred shares awarded are subject to a vesting period which expires at the end of Year 2 in relation to one-half of the shares and the end of Year 3
in relation to the other half of the shares.
Additional Information – Non-statutory Remuneration Methodology
Base pay (cash FAR) and other remuneration in non-statutory remuneration tables on pages 44 and 47 are the same as those
reported in the statutory remuneration tables on pages 45 and 49.
The STIP amount shown in the non-statutory remuneration tables is the full value of the STIP awarded for the corresponding year
calculated as a product of FAR, AT Target Opportunity, STIP Scorecard Result and Individual Performance Factor (rather than
amortising the accounting value over the relevant performance and service period as per the accounting standards).
The LTIP amount shown in the non-statutory remuneration tables is equal to the number of Rights vested during the year multiplied
by the fair value of the Right at grant date (rather than amortising the accounting value over the relevant performance and service
period as per the accounting standards).
Risk Management
The STIP and the LTIP have design elements that protect against the risk of unintended and unjustified pay outcomes, that is:
— Diversity in their performance measures, which as a suite of measures cannot be directly and imprudently influenced
by one individual employee
— Clear maximums defined for scorecard outcomes under the STIP and a challenging vesting scale under the LTIP
— Diversity in the timeframes in which performance is measured, with performance under the STIP being measured
over one year and performance under the LTIP being measured over three years
— Deferral of a portion of awards under the STIP with a restriction period of up to two years. This creates an alignment
with shareholder interests and also provides a clawback mechanism in that the Board may forfeit restricted STIP awards
if they were later found to have been awarded as a result of material financial misstatement
While formal management shareholding requirements are not imposed, the CEO has a material holding in Qantas shares,
currently valued at around 1.5 times FAR. The potential equity awards under the STIP and the LTIP will assist Executives in
maintaining shareholdings in Qantas.
Remuneration Report (Audited) continued
QANTAS ANNUAL REPORT 2012060