Qantas 2013 Annual Report Download - page 81

79
QANTAS ANNUAL REPORT 2013
The Board has determined that awards under the 2012/13 STIP
will be delivered per the plan’s design, that is:
»Two-thirds of the total award will be paid as a cash bonus, and
»One-third of the total award will be made in deferred shares
with atwo year restrictionperiod
More detail on the 2012/13 STIP scorecard outcomes and the
calculation of the CEO’s STIP award is provided on pages 86 to 87.
CEO Incentive Plan Outcome vs Qantas Prot Performance
$0
$100
$200
$300
$400
$500
2008/
2009 2009/ 2010 2010/ 2011 2011/ 2012 2012/ 2013
$100
$377
$552
$95
$192
0%
50%
100%
150%
Underlying PBT ($ million)
STIP Scorecard Outcome (%)
STIP Scorecard Outcome
Underlying PBT
Long Term Incentive – LTIP Outcome
The 2011–2013 LTIP was tested against the performance hurdles
as at 30 June 2013 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 2012/2013 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 signicantly from the outcomes for the CEO resulting from
performance in 2012/2013 outlined on page 78.
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 and current years’ STIP awards
Accounting standards require STIP remuneration to be
expensed (and therefore included as remuneration) in
nancial years which differ from the year of scorecard
performance (although any cash bonus is expensed in the
year of scorecard performance). This creates a disconnect
between statutory remuneration and the remuneration
earned from the corresponding years’ nancial and non-
nancial scorecard performance.
»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 2012/2013 (under the 2011–2013
LTIP), 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 2012–2014 and the 2013–2015 LTIP
awards.Testing will be undertaken as at 30 June 2014 and 30
June 2015 to determine whether Mr Joyce receives any shares
underthese awards.
As a result, an LTIP expense of $1.794 million is included in the
statutory remuneration table even though no LTIP awards
vested during 2012/2013. The following is a summary of the
statutory remuneration disclosures for the CEO (the full
statutory table is provided on page 82).
CEO Statutory
Remuneration Table 2013
$’000
2012
$’000
2013
“At Target” Pay
$’000
Base Pay (Cash FAR)12,109 2,109 2,125
STIP – Cash 775 – 1,700
STIP – Share Based 375 2,163 850
LTIP 1,794 1,134 1,700
Other259 171 n/a
Total 5,112 5,577 6,375
1 Reported Cash FAR is FAR of $2,125,000 (2012: $2,125,000) less superannuation
contributions of $16,470 (2012: $15,775).
2 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).
REMUNERATION REPORT FOR THE YEAR ENDED 30 JUNE 2013
The Remuneration Report sets out remuneration information for
Non-Executive Directors, the CEO and Executive Management.
Section 300A of the Corporations Act 2001 requires disclosure
of remuneration information for Key Management Personnel
(KMP), with KMP dened in AASB 124 Related Party Disclosures
as those persons having authority and responsibility for
planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or
otherwise) of that entity.
The KMP for the 2012/2013 nancial year includes some
members of Executive Management.
1 EXECUTIVE REMUNERATION OBJECTIVES AND APPROACH
In determining Executive remuneration, the Board aims to
do the following:
»Attract, retain and appropriately reward a capable
Executiveteam
»Motivate the Executive team to meet the unique challenges
the company faces as a major international airline based
inAustralia
»Link remuneration to performance