Qantas 2013 Annual Report Download - page 90

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Directors’ Report continued
FOR THE YEAR ENDED 30 JUNE 2013
Long Term
Incentive Plan
also referred to
asthe LTIP
(continued)
Basket of Global Listed Airlines
Up to one-half of the total number of Rights granted may vest based on the relative TSR performance
of Qantas in comparison to the basket of Global Listed Airlines selected by the Board as follows:
Qantas TSR Performance Compared to the Global Listed Airline Basket Vesting Scale
Below 50th percentile
Between 50th and 75th percentile
At or above 75th percentile
Nil vesting
Linear scale: 50% to 99% vesting
100% vesting
The basket of Global Listed Airlines has been selected with regard to nancial standing, level of government
involvement and its representation of Qantas’ key competitor markets. For the 2013–2015 LTIP, the basket of
Global Listed Airlines contains the following full-service and value-based airlines: Air Asia, Air France/KLM,
Air New Zealand, All Nippon Airways, British Airways/Iberia (International Airlines Group), Cathay Pacic,
DeltaAirlines, Easyjet, LATAM Airlines Group, Lufthansa, Ryanair, Singapore Airlines, Southwest Airlines,
Tiger Airways and Virgin Australia. The 2011–2013 LTIP and the 2012–2014 LTIP included American Airlines
(AMRCorporation) butexcluded All Nippon Airways and LATAM Airlines Group from the basket of Global
ListedAirlines. The 2011–2013 LTIP also excluded Air Asia.
How are Rights treated on termination?
In general, any Rights which have not vested will be forfeited if the relevant Executive ceases employment
with the Qantas Group.
In limited circumstances (for example, retirement, redundancy, death or total and permanent disablement),
a deferred cash payment may be made at the end of the performance period. This payment is determined
with regard to the value of the LTIP Rights which would have vested had they not lapsed, and:
»Part of the performance period that the Executive served prior to termination, and
»The actual level of vesting that is ultimately achieved at the end of the performance period
The Board retains discretion to determine otherwise in appropriate circumstances, which may include leaving
some or all of the LTIP Rights on “foot”, or for some or all of the LTIP Rights to vest on cessation of employment
having regard to the portion of the performance period that has elapsed and the degree to which the
performance conditions have been achieved.
What was the LTIP outcome for the year ended 30 June 2013?
LTIP awards under the 2011–2013 LTIP were tested as at 30 June 2013 and the performance hurdles were not
achieved. Therefore, 2011–2013 LTIP Rights did not vest and all Rights lapsed.
How are LTIP Rights treated if a change of control occurs?
In the event of a change of control, and to the extent that Rights have not already lapsed, the Board
determines whether the LTIP Rights vest or otherwise.
What happens if companies in the comparator groups de-list?
Companies that de-list due to business failure are assigned a TSR of minus 100 per cent fairly representing
the negative outcome for shareholders in those companies. Comparator companies that are acquired, and
where the continuing entity is a listed company (for which TSR is available), will have their TSR measured to
the date of acquisition and then it is assumed the proceeds are re-invested in the continuing listed entity.
This approach also ensures that shareholder outcomes are fairly reected in the LTIP results.
Remuneration Report (Audited)
c
ontinue
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