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Directors’ Report continued
For the year ended 30 June 2016
REMUNERATION REPORT (AUDITED) CONTINUED
Based on the Board’s assessment of performance against the
STIP scorecard measures and the CEO’s individual performance,
the CEO’s STIP award was calculated as follows:
Total =Base Pay x‘At Target’
Opportunity xScorecard
Result x
Individual
Performance
Factor
4,896,000 =2,125,000 x120% x160% x1.2
The CEO’s 2015/16 STIP award was paid two-thirds as a cash
bonus of $3,264,000 and one-third as deferred shares worth
$1,632,000 with a two year restriction period.
More detail on the 2015/16 STIP is provided on pages 37 to 42.
Long Term Incentive – 2014–2016 LTIP Outcome
At the 2013 Annual General Meeting (AGM), shareholders
approved an award of 2,151,000 Rights to the CEO under the
2014–2016 LTIP. The vesting of these Rights was subject
to Qantas TSR performance compared to two peer groups
(companies with ordinary shares included in the ASX100 and
Global Listed Airlines).
Over the three year performance period of the 2014–2016
LTIP, the Qantas share price grew from $1.35 to $2.82, and
together with the capital structure initiatives delivered a TSR
of+109percent.
The following graph demonstrates Qantas TSR performance
versus the ASX100 and MSCI World Airline Indices over the
performance period of the 2014–2016 LTIP.
-50%
0%
50%
100%
150%
200%
250%
QANTAS TSR PERFORMANCE v PEER GROUPS (%)
Qantas S&P / ASX 100 MSCI World Airlines
1 July 2013 1 July 2014 1 July 2015 30 June 2016
This share price performance meant that Qantas ranked 2nd in
the ASX100 and ranked 2nd in the Global Listed Airlines. Based
on this performance, 100 per cent of Rights vested and the CEO
was awarded 2,151,000 shares.
The face value of the vested shares based on the Qantas share
price at the start of the performance period was $2,904,000.
The value of these shares increased by $3,162,000 over the three
year performance period.
CEO REMUNERATION OUTCOMES HISTORY
(2010/2011 TO 2015/2016)
The Group’s incentive awards are designed to align Executive
remuneration with business performance. This is demonstrated
in the history of the incentive plan outcomes for the CEO.
20%
40%
60%
80%
100%
120%
140%
160%
2011
$552
2012
$95
2013
$186
2014
($646)
2015
$975
2016
$1,532
65%
0%0%0%0%0%0%
STIP LTIP STIP LTIP STIP LTIP STIP LTIP STIP LTIP STIP LTIP
OUTCOME %
LTIP Vesting
STIP Scorecard Outcome
Outcomes:
Underlying
PBT ($m):
100%
160%
85%
140%
38%
65%
STATUTORY REMUNERATION DISCLOSURES FOR THE
CEO
The statutory remuneration disclosures are prepared in
accordance with Australian Accounting Standards and differ
significantly from the outcomes for the CEO resulting from
performance in 2015/2016 outlined on page 32.
These differences arise due to the accounting treatment of
share-based payments for the STIP and LTIP. A reconciliation of
remuneration outcomes to statutory remuneration disclosures
is provided on page 37.
CEO Statutory Remuneration Table
2016
$’000
2015
$’000
2016 ‘At
Target’ Pay
$’000
Base Pay (cash) 2,106 2,000 2,125
STIP – cash bonus 3,264 1,904 1,700
STIP – share-based 836 423 850
LTIP 2,330 2,261 1,7001
Other (108) 112 –
Total 8,428 6,700 6,375
1 The ‘At Target’ Pay for LTIP is set based on a fair value allocation methodology for LTIP
awards. The ‘At Target’ value applying a face value methodology for the 2014–2016 LTIP
would be $2,904,000.
33
QANTAS ANNUAL REPORT 2016