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78
Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2013
Long Term Incentive
The long term incentive plan at Qantas is known as the LTIP and involves the granting of Rights over Qantas shares. Participation
is limited to Senior Executives of the Qantas Group.
If performance conditions over a three year period are achieved, the Rights vest and convert to Qantas shares on a one-for-one
basis. If performance conditions are not met, the Rights lapse.
For the 2013–2015 LTIP the performance conditions are:
»The relative Total Shareholder Return (TSR) of Qantas compared to companies with ordinary shares included in the S&P/ASX 100
Index (ASX 100), and
»The relative TSR of Qantas compared to an airline peer group
The LTIP is described in more detail on pages 87 to 88.
REMUNERATION OUTCOMES FOR THE CEO IN 2012/2013
Mr Joyce’s total remuneration outcome for 2012/2013 was $3.331 million1.
The following table outlines the remuneration outcomes for the CEO for 2012/2013.
CEO Remuneration Outcomes (Non-statutory)12013
$’000
2012
$’000
2013
“At Target” Pay
$’000
2013 vs
“At Target” Pay
%
Base pay (Cash FAR)2 2,109 2,109 2,125 n/a
STIP – cash bonus 775 – 1,700 (54)
STIP – deferred award 388 – 850 (54)
LTIP ––1,700(100)
Other359 171 – n/a
Total 3,331 2,280 6,375 (48)
1 Detail of non-statutory remuneration methodology is explained on page 92.
2 Reported Cash FAR is FAR of $2,125,000 (2012: $2,125,000) less superannuation contributions of $16,470 (2012: $15,775).
3 Includes non-cash benets (such as travel), annual leave accruals, post-employment and other long-term benets plus superannuation contributions of $16,470 (2012: $15,775).
The remuneration decisions and outcomes detailed in the table above are particularly useful in assessing the CEO’s pay in
2012/2013 and its alignment with Qantas’ performance. That is, the table reects:
»A $1.163 million award under the annual incentive for 2012/2013 (with $775,200 paid as a cash bonus and $387,600 made as
a deferred share award)
»The long term incentive (under the 2011–2013 LTIP) did not vest based on the three year performance period to 30 June 2013
»The CEO’s total remuneration outcome for 2012/2013 is 46 per cent higher than his 2011/2012 outcome, due to the CEO not receiving
a STIP award in 2011/2012
»The CEO’s total remuneration outcome for 2012/2013 is 48 per cent lower than his “at target” pay
Base Pay – Cash FAR
Mr Joyce did not receive an increase in base pay during 2012/2013 and his base pay will remain unchanged for 2013/2014. Cash FAR
(or Base Pay) is FAR less superannuation contributions (of $16,470).
Annual Incentive – 2012/13 STIP Outcome
In determining the annual STIP outcome, the Board assesses performance against nancial, safety and other key business
measures as partof a balanced scorecard. The Board is mindful of the imperative to ensure that actions taken during each year
support the long term strategic positioning and sustainability of Qantas. The Board is particularly focused on ensuring that progress
is made each year towards furthering our strategic objectives rather than focusing solely on current year prot. The Board sees this
“Balanced Scorecard” approach as an important design element of the STIP.
In this regard, the Board is satised that during 2012/2013, Management continued to invest appropriately in our domestic businesses,
in transforming Qantas International and in the progress of Jetstar in Asia notwithstanding challenges to short-term protability.
The Underlying PBT result of $192 million was below both the Underlying PBT target and the Underlying PBT threshold set by the
Board for 2012/2013. There was no contribution to the STIP scorecard under the nancial measures that make up 60 per cent
of the scorecard.
The Board did however determine an overall STIP scorecard outcome of 38 per cent in recognition of strong achievement against
the safety and other key business measures. In calculating the CEO’s 2012/13 STIP award, the Board applied an Individual
Performance Factor of 1.20.
Remuneration Report (Audited)
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ontinue
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