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35
QANTAS ANNUAL REPORT 2015
A reconciliation of the CEO’s remuneration outcome to the statutory disclosures is detailed below as an example.
CEO’s Remuneration Outcome to Statutory Remuneration Disclosure for 2014/2015
Reconciliation ($’000) Description
Remuneration outcome for the CEO for 2014/2015
11,88 4
Treatment of STIP
Add: Accounting value for 2012/13 STIP and
2014/15 STIP deferred awards
Less: 2014/15 STIP deferred award
423
(952)
The STIP amount shown in the remuneration outcomes tables is the
full value of the STIP awarded for the corresponding year calculated
as a product of Base Pay, ‘At Target’ Opportunity, STIP Scorecard
Result and Individual Performance Factor (rather than amortising
the accounting values over the relevant performance and service
periods as per the accounting standards).
Treatment of LTIP
Add: Accounting value for LTIP award tested
on relative TSR performance (2013–2015 LTIP)1
850 The LTIP amount shown in the remuneration outcomes tables is
made up of the value of the LTIP driven by vesting based on the
share price at the start of the performance period and value of
the LTIP driven by share price growth (rather than amortising the
accounting values over the relevant performance and service
periods as per the accounting standards).
Add: Accounting value for LTIP award to be
tested in a future year (2014–2016 LTIP)2
670
Add: Accounting value for LTIP award to be
tested in a future year (2015–2017 LTIP)3
741
Less: 2013–2015 LTIP – vesting4(2,353)
Less: 2013–2015 LTIP – share price growth5(4,563)
Statutory remuneration disclosure for the
CEO for 2014/2015 6,700
1 The 2013–2015 LTIP was tested as at 30 June 2015. 85 per cent of Rights vested and the remaining Rights lapsed.
2 The 2014–2016 LTIP is due to be tested as at 30 June 2016. The Qantas share price at the start of the performance period (1 July 2013) was $1.35.
3 The 2015–2017 LTIP is due to be tested as at 30 June 2017. The Qantas share price at the start of the performance period (1 July 2014) was $1.26.
4 The face value of shares awarded based on the Qantas share price at the start of the performance period (1 July 2012).
5 The increase in the value of the share award from the start of the performance period (1 July 2012) to the end of the performance period (30 June 2015).
6) EXECUTIVE REMUNERATION STRUCTURE
Base Pay Base Pay is a guaranteed salary level, inclusive of superannuation. Each year, the Remuneration Committee
reviews the Base Pay for the CEO and Executive Management. An individual’s Base Pay, being a guaranteed
salary level, is not related to Qantas’ performance in a specific year.
Base Pay (cash), as disclosed in the remuneration tables, excludes superannuation (which is disclosed as
Post-employment Benefits) and includes salary sacrifice components such as motor vehicles.
In performing a Base Pay review, the Board makes reference to external market data including comparable
roles in other listed Australian companies and international airlines. The primary benchmark is a revenue-
based peer group of other listed Australian companies. The Board believes this is the appropriate benchmark,
as it is the comparator group whose roles best mirror the size, complexity and challenges in managing Qantas’
businesses and is also the peer group with whom Qantas competes for Executive talent.
A general management pay freeze was in place during 2014/2015 and there have been no increases to the
Base Pay for Mr Joyce since July 2011 and for Mr Evans, Ms Hrdlicka and Ms Grant since July 2012. In addition,
the CEO opted to forgo five per cent of his Base Pay from 1 January 2014 until 30 June 2015.
Mr David and Mr La Spina commenced in their KMP roles on 1 March 2015 and their Base Pay was set at a
level lower than their predecessors.
The Base Pay for each Executive KMP is outlined on page 40.
Annual Incentive The Short Term Incentive Plan (STIP) is the annual ‘at risk’ incentive plan for members of Qantas Executive
Management. Each year these Executives may receive an award that is a combination of cash and restricted
shares to the extent that the Plan’s performance conditions are achieved.
Performance
Conditions
The Board sets a ‘scorecard’ of performance conditions for the 2014/15 STIP, explicitly aligning the performance
measures to the Qantas Group strategy. Underlying PBT is the key budgetary and financial performance
measure for the Qantas Group and is therefore the key performance measure in the STIP scorecard.
The Board sets targets for each scorecard measure, and at the end of the financial year the Board assesses
performance against each scorecard measure and determines the overall STIP scorecard outcome.
A detailed description of the STIP scorecard is provided on pages 38 to 39.
The Board retains discretion over any awards made under the STIP. For example, the Board may decide to
adjust the STIP scorecard outcome where it determines that it does not reflect the performance achieved
during the year. Circumstances may occur where scorecard measures have been achieved or exceeded, but in
the view of the Board it is inappropriate to make a cash award under the STIP. The Board may determine